They say that the stock market is a battle between the bears and the bulls. There are few assets that make this battle more clear that Twitter (NYSE:TWTR). I've been bearish on TWTR for quite some time now, and I really see no fundamental reason to expect gains. However, just about every day, I see an article titled “This could send TWTR up!” or “Get ready for gains on Twitter!” or something else exciting and insinuating growth. For example, yesterday, one of my favorite sites, Profit Confidential published an article entitled “TWTR Stock: If Twitter Inc Pulls This Off, the Stock Could Skyrocket”. Now, as I said above, Profit Confidential is one of my favorite sources. However, this is one of those cases where the hammer has missed the head of the nail! You got it wrong my friends! Today, we'll talk about what they said in the article, and why TWTR is never likely to pull it off!
Outlining Twitter's Problems
There's no qualms between what the real issue for Twitter is. In fact, the author of the article, Jing Pan, B.Sc, MA and I see eye to eye on the struggles Twitter has been facing. The company simply can't seem to get new users in the door. In fact, TWTR has been so focused on advertisers that it hasn't had time to focus on its users, and as such, we've seen declines in daily active users...something we haven't seen on a social network since MySpace, which has in time become... My What? Anyway, the problem for TWTR is actually a relatively simple one. The company can't seem to drive the users, and without users, there's no such thing as a social network.
Pan Sees An Opportunity
In his post, Jing Pan explained that Twitter hasn't been focusing its efforts where it should be. In fact, for TWTR to start driving in users, it needs to work to promote the benefits of the social network. Pan explains that Pariscope is a great program, and that if more people knew about it, more people would be signing up for Twitter in order to use it. He also points out that TWTR is commonly used as a news source and that the company should promote it as such. Essentially, Pan believes that promoting the features, rather than the brand, will likely lead to strong growth in user data on the social network.
Here's Where I Disagree
First off, I have to say that Pan is a genius, I've followed his writing ever since I first saw him online, and he really does know what he's talking about. I can also say, that I agree 100% with his title in the sense that he says “If Twitter Pulls This Off” not “When Twitter Pulls This Off” it could skyrocket. Truth be told, Pan has a great plan for getting growth in TWTR users. However, the problem isn't the plan, it's the company. You see, TWTR knows that the problem is user growth. Nonetheless, instead of focusing on user growth, the company has focused on creating new ad systems, going through with acquisitions that will help make ads better, and more. They simply haven't focused on users. In reality, TWTR has showed a fundamental lack of focus, planning, and execution. The truth is that Dorsey is not a good CEO for the company, and its board of directors needs a complete makeover. Yes, if TWTR was able to pull of what Pan was talking about, it could skyrocket. However, for the company to pull off such a plan, they will need to be focused, driven, and ready to make things happen. These are qualities that those at TWTR just don't seem to have. Heck, I'm surprised the company's leaders are even able to pull off their pants to go to the bathroom at this point! Is it possible for Twitter to grow? Sure it is.