Business and financial analysts have announced on Tuesday that stocks of Twitter have been on a massive downslide. Numbers indicate that the social media platform has been trending downward by a staggering all time low of 18 percent, a record volume of more than 124 million shares. This news comes just as the lock-up period of the social media giant expired, allowing Twitter’s current share holders to sell off a reported 470 million shares.
If past experiences with tech companies and lock-up expirations are any indication, Twitter could be in for a bit of a financial snag. Similarly, rival company Facebook experienced rock bottom prices once investors unloaded and sold of their shares back in 2012 when that lock-up expired. Analysts are reporting for Twitter to tweet with better returns in their stock prices, they are going to have to do a few things to keep themselves growing. Some say that the company is going to have to find ways to increase its reach with advertisers as well as come up with clever ways to engage users and increase their current user base. Those following Twitter’s performance believe that the company will most likely not see a rebound until the second half of the year.
Twitter had been trending high on last year’s initial public offering performing strong north of $70 a share. Since that rally, the company’s shares had not kept its upward tick, having floated down to the ground perched in the first quarter of 2014 trading at just $39 which to its credit, is better than the original IPO price of $26.
Those with an eye on the tech markets say what investors and analysts need to do is not try to compare the apples of Facebook to the oranges of Twitter as both platforms are uniquely different in their own respective ways. Whereas Facebook is more dependent on the social interaction of its subscribers, Twitter is said to be focused on the immediate dissemination of information. In an effort to further boost their presence, Twitter has just announced plans to partner with online retailer Amazon to help tweeters utilize the social media app to shop directly from links in their Twitter feed.
With approximately 500 million active users, Twitter had become the easy to utilize social media tool that has fast become the go to platform for sending and receiving information. With a text field restricted to 140 characters, users transmit and receive succinct information at speeds that cannot be matched by other media like television broadcast and traditional newspapers. Launching in 2006, the short message service tool generates approximately 350 million tweets per day. While the content being posted on Twitter ranges from news, information and self promotion, a reported 40 percent of the messages being posted are identified as pointless babble.
Some Twitter shareholders who intend to maintain and keep the media platform as a part of their investment portfolio are said to be not too worried about the stock trending down. With the expiration of the lock-up and a noted need to take the platform to a new level of revenue generation, time will tell if Twitter will chirp with news of an up trend in its stocks again.
By Hal Banfield