Thursday, October 27, 2016

Twitter Fritter v.11

The losses at Twitter have stabilized at around $100 million per quarter. 3Q2016 showed a net profit of -$102 million. Twitter likes to focus on non-GAAP numbers like eyeballs/tweet, impressions/stock option, and so forth. There was great excitement last quarter as tech heavy hitters sniffed around and acquisition rumors were rampant. Alas, they all found the nearest exit when they found the building was on fire. With no white knight, Twitter says they are going to layoff 9% of their work force. 3.64 million new shares of stock were issued this quarter to keep the company running.

Updated fundamentals:
1/8/2013 - twitter IPO stock price $41.65
1/3/2014 - twitter high stock price $69.00
1/13/2016 - twitter closing stock price $18.69, 682.95 million shares outstanding
5/11/2016 - twitter closing stock price $14.59, 694.85 million shares outstanding
7/28/2016 - twitter closing stock price $16.31, 696.57 million shares outstanding
10/27/2016 - twitter closing stock price $17.40, 700.21 million shares outstanding

Twitter stock price change from IPO price: -58%

Dividend: zilch
EPS: -0.60

Monday, October 24, 2016

Bloomberg on Twitter

Everyone is kicking Twitter while they are down, including Bloomberg. Twitter is planning an 8% layoff, perhaps as soon as this week.

The facts are stated, well, matter of factly (emphasis mine)...
Twitter, which loses money, is trying to control spending as sales growth slows.
Twitter, which loses money. Since it started. Every. Single. Quarter...Ever.
Twitter’s losses and 40 percent fall in its share price the past 12 months have made it more difficult for the company to pay its engineers with stock.
The whole scheme has been very dot com version 1.0, selling worthless stock on the basis of "eyeballs". It has worked for a long time, but if it stops working, the cash flow dries up and everything implodes. Brace for impact.

Bronte Capital on Twitter

It seems that great minds think alike. Well, at least there is some consensus on Twitter. Check out this blog post from Bronte Capital.

One of the money quotes:
I received a lot of anecdotes and wild parties and profligate spending, and the plural of anecdote is data - but few things are as convincing as the raw numbers. The conclusion is inescapable. Jack Dorsey - the Twitter CEO - should be fired.
And another:
PS. Twitter staff - I am not exaggerating. Look at the young man on your left and the young woman on your right. Only one of you three will keep your job. Don't worry. It should be worse in the C-Suite. Prepare resumes.
In the spirit of Halloween, it seems all the potential buyers have poked that zombie with a stick and their finance guys got a whiff of the rotting corpse and said "nope". I am looking forward to the next quarterly report.