Lucky you for snatching a serving of the synaptic Zuckerberg congressional subcommittee hearings. Wow. Big senatorial guns fired down while Mark points out that “when you start a business in your dorm room at Harvard and grow it to the scale we are mistakes will be made.”
O.K. Very very nice. That statement’s clear and abundant truth rang in the hearing room. But truth never slows a subcommittee barbecue.
As Cramer also clearly pointed out “hearings are for apologies, again and again.” How well did Mark do? Zuckerberg set a tone of adult at the helm from the start and began each reply or response with “senator.” And that trick never sounded forced.
A seemingly once tone-deaf Facebook shows up in Washington as a mature and responsibility shouldering corporate citizen.
What does FB on the hill have to do with Twitter? Fot those witnessing the hearings the notion of regulation has now morphed into regulation basically in the pipe. That means Twitter too, and Snap, and Google–does anyone really use Google socially?
As the hearings hashed in granular over the Cambridge train-wreck speculation exists concerning lost business by FB flowing to TWTR. Although FB has reported “no shift in user traffic” does it seem probable that no discernible shift in ad dollars will occur?
Mere flakes of digital advertising business for Facebook translates to hefty chucks if landing on Twitter. Watch the bird grow on those worms.
Back on February 8th this year out of San Francisco Twitter informed analysts about history. For the first time TWTR rocked GAAP profitable. The company beat on top and bottom lines and posted an EBITDA margin of 42%. Ah, nice.
Morningstar had been holding a $17 price target. After Q4 they raised to $24. That’s a 40% jump. Was Morningstar that far off, or is Twitter outperforming?
TWTR is in our view dangerous but rather transfixing. Dorsey and crew face the very real and serious challenge of increasing long-flat monthly active users(MAUs) counts, that is if they wish to remain investable.
TWTR is speculative, but posting impressive performances. Their cost-cutting is spectacular, and meaningful. How about 27% ad revenue growth on a flat MAU base? Don’t forget a 2% revenue growth, and 7% on owned-and-operated(O&O) advertising properties. Growth came across all products and geographies.
Nothing easy, exactly, lies ahead. That includes further and necessary monetizing of the company’s current user base. Dorsey says they’re working on that.
Despite a flat MAU base overall user engagement continues to grow, as did Q4s advertising revenue–like we said up 27%. Who runs two near break-out companies simultaneously? Maybe Jack Dorsey and teams. We think we’ll stay for now.
