E Twitter Is Having Its Moment

Source: https://www.tickertags.com

This is Twitter’s (TWTR) moment. After announcing “moments” on October 6, the stock rallied from the mid $25’s and is about to break above $30. It is no longer prudent to sell or short-sell this social media stock.

A quick check of Twitter’s stock price against the hashtags “Twitter” and “Moments” reveals a signal. Following the announcement, Twitter shares traded above $30, the first time since August.

Moments are like a highlight reel. At an instant, users, in particular infrequent ones, may check and quickly access the best posts. This is not connected to the accounts the user is following.

The change may mean higher return rates, usage, and activity for the declining user base. This past July, user growth stalled to 316 million monthly active users.

Periscope, which already has 37,000 followers, should also help Twitter gain back some market share in the social media world. Meerkat proved there was a demand for videos on the stream. Periscope ensures Twitter keeps its relevance in this space.

Twitter has plenty of cash, but it also has quite a high level of convertible debt:

ASSETS

12/31/2014

3/31/2015

6/30/2015

9/30/2015

Cash

1,510.72

1,607.41

883.31

—

Convertible Debt

1,376.02

1,395.11

1,414.90

—

$ million

Data source: Kapitall.com

Cash flow is negative. Twitter’s focus on bringing back users will attract advertisers. This would boost revenue and stem the negative income quarter after quarter:

TYPE

12/31/2014

3/31/2015

6/30/2015

9/30/2015

Net Income

-577.82

-162.44

-299.11

—

Cash Equivalents Beginning of Period

841.01