It is difficult to converse new users into inflow of money
Here’s a Thought! 24 July, 2020, by Vladimir Rojankovski, Senior Analyst, Grand Capital
Twitter (TWTR) second quarter revenue unexpectedly fell 19% YoY to $683 million. In the same quarter of 2019, revenue was $841 million and diluted earnings per share were $1.43. Shares of TWTR are, nevertheless, added pretty 4% at yesterday’s market close. What happened?
During its conference call Twitter used foolproof narrative about its beloved users. It said that average daily users (DAU) expanded to 186 million over the quarter, up from 166 million at the first quarter’s close. They also grew 34 percent year-over-year – the highest year-on-year growth since the firm began tracking that metric.
The biggest problem with this rhetoric is that large chunk of this army of users won’t ever be monetized. Investors tend to get disenchanted over time when they don’t see money behind new users. Such practices showed how difficult it usually is to converse new users into inflow of money in very well known examples of such companies as Snap, Pinterest, Zoom, Zoom Info and even TikTok.
Twitter (TWTR) second quarter revenue unexpectedly fell 19% YoY to $683 million. In the same quarter of 2019, revenue was $841 million and diluted earnings per share were $1.43. Shares of TWTR are, nevertheless, added pretty 4% at yesterday’s market close. What happened?
During its conference call Twitter used foolproof narrative about its beloved users. It said that average daily users (DAU) expanded to 186 million over the quarter, up from 166 million at the first quarter’s close. They also grew 34 percent year-over-year – the highest year-on-year growth since the firm began tracking that metric.
The biggest problem with this rhetoric is that large chunk of this army of users won’t ever be monetized. Investors tend to get disenchanted over time when they don’t see money behind new users. Such practices showed how difficult it usually is to converse new users into inflow of money in very well known examples of such companies as Snap, Pinterest, Zoom, Zoom Info and even TikTok.