Is Twitter able to survive?
Nowadays, we cannot think of a world without social media. For most people in the Netherlands social media is part of their daily activities, it plays a huge part in everyday life. Facebook, LinkedIn and Instagram are the leading social networks in the Netherlands and are very visible and present for most people. But how is Twitter doing? Last year they were not part of the daily conversation and their presence in a positive way in news and magazines was very low.
Twitter has performed very poorly last year and their stock prices has dropped from $36,56 on 1 January 2015 till $24,68 on 1 October 2015. This is an decrease of 32,5% in 9 months which is very large for a company like Twitter which had generated a large brand awareness over the previous years.
How is this dramatic decrease established and which factors influenced this decrease? How can it be that Twitter is far behind on for example Facebook?
Twitter still does not have a permanent CEO to lead the company, since 1 July 2015 Costolo, the former CEO, stepped down. To increase investor confidence, strong, competent, and above all consistent leadership is required. Besides the absence of a CEO Twitter lacks innovations and there is still no strategy for how to go forward. There is almost zero user growth and Twitter experiences a lot of competition from Facebook and Instagram. For example Instagram is distinguishing themselves from competition by offering a wide range of possibilities to modify you own pictures. Twitter must find a way to generate more value for its users, or else the stock price will continue to decrease. If this stock price declines too far, Twitter will become a takeover target. It will become attractive for other social media platforms to take over Twitter in order to increase their customer base or extend their options and features.
In my opinion Twitter is in desperate need of a good CEO, a good CEO is a key factor in creating a sustainable and profitable company. What do you think, are there more options to save Twitter from a takeover?
Prazic, Peter (2015) Here’s why Twitter, Inc.’s stock price is declining http://www.profitconfidential.com/stock/twitter-stock-price-is-declining/ 05-10-2015
NRC.nl (2015) Topman Twitter treedt af. http://www.nrc.nl/nieuws/2015/06/11/topman-twitter-treedt-af/ 05-10-2015
Oreskovic, Alexei (2015) Wall Street is waiting for Twitter’s stock to hit the level where it becomes a takeover target. http://uk.businessinsider.com/twitter-declining-stock-price-could-make-it-takeover-target-2015-8?r=US&IR=T 05-10-2015