Synovus Trust Portfolio Manager Dan Morgan on Twitter’s second-quarter results and outlook and the state of the broader tech sector.
Twitter is how much of the world finds out breaking news and interacts with fellow sports fans during a game. But what is its growth potential?
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Twitter posted quarterly earnings on Friday which were considered a huge miss for analysts. Many experts predicted they would post 19 cents per share, but come Friday morning, the adjusted EPS was 5 cents per share.
However, revenue was better than expected at $841.4 million versus the predicted $829.07 million.
Recently, Twitter stopped posting their monthly active users (MAUs), which they claimed was due to the company's shift towards a more accurate metric called monetizable daily active users (mDAUs). Twitter said this analytic unit comes from "Twitter users who log in and access Twitter on any given day through Twitter.com or our Twitter applications that are able to show ads."
The company insisted this changed metric is different from other social media companies' statistics, which includes people who may not be seeing advertisements. For comparison, Twitter's mDAUs of 139 million is lower than Snap's (203 million DAUs) and Facebook's (1.59 billion DAUs).
Analysts say while it's good Twitter is no longer hiding behind possibly false numbers, the plummeting of users is still alarming and may indicate a trend.
"They stopped hiding the numbers because people are becoming less and less engaged with Twitter," Gary Smith said on FOX Business' "Mornings With Maria." "It used to be the greatest news platform in the world."
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Smith argued Twitter now feels like a narcissistic platform where people share what they are doing, but that's not easy to monetize.
Synovus Trade Portfolio Manager Dan Morgan told Maria Bartiromo Twitter's trading value came as a surprise for him, especially since other social media platforms posted large advertising revenue growth.
"What it shows to me is there's not a tremendous amount of growth," Morgan told FOX Business. "I think that's been the real difficulty with Twitter is in turn with their monthly or daily average growth. How do you monetize that? I think the average person is on Twitter for maybe three seconds while, for Facebook, they're on for about 30 minutes."
I think the average person is on Twitter for maybe three seconds while, for Facebook, they’re on for about 30 minutes.
Synovus Trade Portfolio Manager Dan Morgan
Most of Twitter's growth is coming from international usage, but domestically it's seemingly become saturated. But Twitter has big plans when it comes to streaming sports and gaming, with the focus of capitalizing on that market share.
"They have soccer; they have football; they're doing all sorts of things to basically increase the number of usage in terms of time," Morgan told FOX Business. "They're trying to get to the point where people listen for the entire game."
The jury may still be out as to how Twitter is grow overall engagement, but for now, their earnings report is sending its stocker higher.