Twitter slips as analysts lose faith

Twitter shares yesterday slipped after analysts at two firms downgraded the stock, citing a lack of confidence in the company’s direction and ability to capitalise on new products.

“What is Twitter? Quite frankly, we don’t believe that question has been answered,” James Cakmak, an analyst at New York-based equity research firm Monness, Crespi, Hardt said. 

“Barring any changes, Twitter was, is and will continue as a niche product.” 

He downgraded the stock to the equivalent of ‘hold’ from ‘buy’.

Robert Peck, an analyst at SunTrust Robinson Humphrey also lowered his rating on the stock to the equivalent of ‘hold’ from ‘buy’. 

“User growth and engagement for Twitter continue to be challenged, and we believe that increasing monetisation can only go so far with limited new product introductions increasing competition and a challenging advertising background,” he said.

Twitter has been struggling to broaden its appeal beyond journalists, politicians and celebrities using the site for self-promotion. 

It’s betting heavily on live-streaming as a way to make its platform a go-to place to react to and discuss current events. 

An agreement to broadcast American football games had higher-than-expected demand for advertising, spurring Twitter to seek more such deals. 

Yesterday, the company announced an agreement with CBS News to live-stream the Republican National Convention from Cleveland next week and the Democratic National Convention in Philadelphia the week after.

Still, Twitter faces a formidable competitor in Facebook which is also making a big push into live video.


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