3. Twitter, Inc. (NYSE:TWTR)
Number of Hedge Fund Holders: 68
Twitter, Inc. (NYSE:TWTR) is a San Francisco, California-based microblogging and social media company that is 9.2% down for the year.
Twitter, Inc. (NYSE:TWTR) has been leading the news following the announcement that Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk would acquire the company for $44 billion. However, the tech billionaire pulled out from the acquisition because he said the company did not follow multiple clauses of the merger deal.
Twitter, Inc. (NYSE:TWTR) posted its Q2 2022 results on July 22, which missed consensus estimates for revenue and EPS. Revenue fell by 0.8% YoY to $1.18 billion and missed the consensus forecast of $1.32 billion. This was the biggest revenue miss by Twitter, Inc. (NYSE:TWTR) on record. Meanwhile, adjusted loss per share was recorded at eight cents. Furthermore, Twitter, Inc. (NYSE:TWTR) reported Monetizable Daily Active Users (MDAUs) of 237.8 million versus the expectation of 238.08 million. The company blamed the decline in revenue on the challenging macroeconomic environment.
In its Q4 2021 investor letter, Greenwood Investors discussed its stance on Twitter, Inc. (NYSE:TWTR). Here’s what it said:
“The two other advertising challengers in our portfolio, including Twitter (TWTR), have experienced similar volatility while the business fundamentals keep humming along at or above their medium-term plans. At the opposite end of the spectrum, 37-year-old Parag Agrawal was recently named Twitter’s CEO. Parag will be instrumental in improving the notoriously slow execution at Twitter. This relatively unknown insider has only one shot to build a reputation. It is tied to the business plan unveiled a year ago, much to the surprise of a more skeptical audience. He has made swift changes to the leadership and management structure of Twitter in order to deliver on the accelerating user vision, while simultaneously improving the monetization potential of the platform through better targeting and direct-response (commerce-driven) ads.
Agrawal has played a fundamental role in the last decade in improving both timeline and ad relevance for users, and he is much less risk-averse than founder Jack Dorsey. He is keen on using the signal from user interests to better target ads and improve advertiser performance- something that Dorsey only committed to half heartedly. Although skepticism is significant, the re-affirmed commitment to double revenue in just over three years looks conservative to us. We are pleased to see the company doubling down on its commitment to make investments to accelerate user growth while also announcing an accelerated share repurchase plan in recent weeks. In short, he is moving quickly to ensure his reputation lasts longer than the “15 minutes of fame” typically afforded to such young executives.”
