TWTR | Twitter Inc Stock

About Twitter

Some lucky chance, two Presidents, lots of politics and Micheal Jackson’s death involved. Hold on to hear the story how this ‘old’ tech company learns to make money and how the whole Elon Musk-Twitter deal happened.

Twitter appeared as a real-time microblogging platform, in July 2006. Its defining feature is an SMS-like post with a limit on the number of characters, known as a tweet. The highlight of the platform was the 140 characters that could be used to convey the idea. On the contrary to lengthy blog posts, the concept of tweets made you communicate as straight to the point as possible. However, that limit was expanded to 280 in 2017.

The platform came as a result of internal hackathon held at Odeo, a podcasting company, where all 4 Twitter’s founders met. It all started in March 2006 and 5 months of hard developer work later the world saw the first prototype. This was Twitter’s first ever homepage (careful, might hurt your eyes) when it was still called twttr. Until recently Twitter, Inc. had more than 25 offices around the world, 7500 employees and supports 104 languages. We used past tense because Musk might have closed some branches and fired a couple of thousands of people while I’m writing it 😄

Unlike in many startups, Twitter found a growth hack fairly quickly — big events. The first significant boost of users happened next year at the South by Southwest Interactive (SXSWi) conference. The founders set big screens around the venue and streamed all the tweets regarding the conference in real-time. During the event, the number of daily tweets spiked from 20000 to 60000.

2010 FIFA World Cup, NBA Finals, movie premieres and other events provided activity spikes and consequent audience growth. In 2005, the day that Michael Jackson died, the servers couldn’t withstand the influx of 100000 tweets per hours and caused outages on the platform. President Barack Obama held a massive social campaign on Twitter in 2008, which to some extent helped him win the election. Twitter rapidly became an important news source, political discussion platform, a place for announcements of promotions and events announcement, and much more. 

In 2009, Twitter was proclaimed "a new form of social interaction" by the Global Language Monitor, declaring it Because of this, it was often compared to Facebook and pushed to compete in the same niche. Fun fact: Facebook tried buying Twitter — twice, according to Nick Bilton. But founders refused because of low valuation (Zuckerberg offered $500 million) and a culture mis-match, according to the email sent to Twitter’s Board. It turns out that Elon outplayed Zuckerberg?

By 2013 Twitter’s userbase reached 241 million monthly active users. 

Given the unprofitability of the company, it has always been in search of extra features that would either boost the number of users or create income sources. There were two projects that could have been Instagrams for Facebook, but unfortunately they were mismanaged and didn’t thrive. Firstly, Twitter bought Vine, which was similar to Gen Z’s favorite TikTok. Secondly, it was the live video platform Periscope, a predecessor to Instagram Live. 

Perhaps management changes in Twitter’s top executives were the reason those platforms didn’t grow well. They changed every 2-5 years: founder Jack Dorsey (2006-2008), founder Evan Williams (2008-2010), then shortly after that Dick Costolo (2010-2015) and followed by another Jack Dorsey turn (2015-2020), former CTO Parag Agrawal (2021-2022), and finally Elon Musk (from Oct 27). 

If you’ve been on Twitter for a long time, you might remember some of their experiments such as donations, currency for tweets, organized topics, Twitter Spaces (a clone of Clubhouse’s live audio platform) or others. The main question is: how many of them are still alive? 🤔

None.

Let’s move to the twitter stock chart so see how the company’s been performing financially. 

Twitter Stock Price Ups and Downs

Here you can see the historical chart of NYSE: TWTR which ends on Oct 27, 2022, the day Elon Musk bought out the company and Twitter got delisted from the stock market. 

2013, the year Twitter went public, was stellar, as the company grew 60% in 3 months. In November they held an IPO with a starting price of $26, and by the end of the year the stock price was already at $68. The high demand is understandable, as at that time the number of monthly active users had been growing almost 20 mln every quarter and reached 241 million. 

Then as we can see, investors’ enthusiasm fell pretty quickly in the next 3 years as the company was struggling to meet targets and went through several CEO changes as we mentioned earlier. The main metric the company was presenting to shareholders was monthly active users (MAUs) and the targets back then were very ambitious: 400 million MAUs. When in 2013 it was still 241 million, 288 million in 2014, 320 million at the end of 2015. As of Q2 2022, Twitter’s MAU is 237 million people. 

As for financials, Twitter has also struggled to make money for 10 years. In the chart below you can see its income (revenue minus costs) since 2022. So 2017 became a tipping point for the Twitter stock as it finally became profitable in the last quarter of 2017, when it had 330 million monthly users, and the TWTR stock price started to rise from the dead.

Despite the profit drop in 2020, Twitter stock experienced considerable growth during the pandemic in 2020 for two reasons: the general inclination towards social media during isolation and a rally on the stock market. 

However, in the face of competition with short video formats such as TikTok, YT Shorts, IG reels, Twitter is failing to attract the young audience and it’s highly doubtful that it will ever reach 400 million MAUs. That’s why we see this decline in the past years. The company went private on October 27, so the Twitter share prices froze at $53.70, and that’s how much all the remaining shareholders were paid per share before the company was delisted.

Fun fact: Twitter’s stock symbol was TWTR. There was a company called Tweeter Audio and Video, a small electronics company, with a ticker TWTRQ. Some investors confused TWTR stock with TWTRQ, which made the stock jump 1,800% on Oct. 4, 2013, the day after Twitter announced its IPO. The market was quick to realize that they got it wrong and the price came back to normal penny stock few days later.

Elon Musk & Twitter: What’s Next?

Tweets now cause crypto and stock market pumps and dumps (like Elon and Shiba Inu coin), deliver the fastest news around the world and spread even further than planet Earth. No wonder the world’s most eccentric billionaire bought it. 

At first, Musk started criticizing Twitter’s moderation policies and accused it of ‘undermining democracy.’. In the SEC filing Musk said “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.” 

In April it got revealed that his stake was already 9.1%, but he reassured that he had no intentions to buy out, so he got appointed to its Board of Directors. Just a week later he offered to buy Twitter for $54.20 a share or about $44 billion in total. At that moment, Twitter stock prices skyrocketed 30% and then fell by almost a third three months later, as Musk announced that he was withdrawing his bid for Twitter because of having too many spambot accounts. A lawsuit was filed by Twitter against Musk in July 2022, but in the end Twitter’s shareholders voted to accept Musk’s proposal.

On Oct 27, 2022 Musk closed the deal and acquired Twitter, which is why the Twitter stock price today is unavailable as the company has been delisted and is now fully private. He fired some of the top executives including the CEO, CFO, CLO, and others. Moreover, approximately half of Twitter’s 7500-person workforce will be laid off beginning November.

With this being said, we expect "lots of dumb things in the coming months." The first such thing is that users can access verification with Twitter Blue, a subscription service that costs $8 per month.

In fact, Musk has recently announced more long-term plans on how he wants to change the company. Citing minutes from his recent staff meeting, it appears to be in 3 ways: 

• “enabling people on Twitter to able to send money anywhere in the world instantly and in real-time”
• “video content and compensating content creators”
• improving search. 

Musk believes “he will quintuple Twitter's revenue by 2028, increasing annual earnings to $26.4 billion” and given his reputation for disruption, it is going to be a spectacular show of Twitter’s transformation in the upcoming years.

Enjoy the show, dear readers!

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