Twitter: Jack Dorsey Should Take Lessons From Mark ZuckerbergTWTR) a few months ago, but I soon turned bearish on the stock after it jumped over 20% in the new few weeks. While there were a few reasons to be bullish on Twitter back then, I changed my stance because of Twitter’s incompetent management. Since then, Twitter has lost over 30% of its value.
At current levels, I am neutral on Twitter. However, there are a few things the company needs to work on in order to be considered a good long-term investment.
Monetizing its user base
Twitter has a huge user base.
The only reason why I think Twitter isn’t doing as well as it should is that Jack Dorsey is still the company’s CEO. While Facebook has continued to deliver in every quarter thanks to the brilliance of Mark Zuckerberg, Twitter has failed to fulfill its potential due to its incompetent board. There is a big difference in the ability of Facebook’s board and Twitter’s board and it is evident by the direction in which both the companies are heading. For instance, most of Facebook’s board members are active on Facebook and use it regularly, whereas the same can’t be said for Twitter’s board members.
CEOs like Jack Dorsey or Dick Costolo have been the primary reason for Twitter’s underperformance. And the fact that Twitter’s board has reappointed Dorsey proves that the company’s board is incompetent as well.
As long as Jack Dorsey is in charge, I don’t see Twitter doing any better in the long-term, which is why I would not recommend buying the stock. However, with Twitter falling too much in a small period of time, it can soon break out due to technical reasons. Hence, I am neutral on the stock for the time being.
Unlike Facebook, Twitter has failed to monetize its user base and the primary reason for the underperformance has been the company’s board and in particular, the CEO. As long as Dorsey is the CEO of Twitter, the company’s massive potential will be wasted. Hence, I think investors should currently wait on the sidelines.
Published on May 4, 2016By Ayush Singh