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Why Twitter Inc (TWTR) is Trending Today

Although the broader market is in the green, Twitter Inc (NYSE:TWTR) shares are off $0.12 per share, or 0.85%, this morning likely due to today’s Amazon news. According to Recode, Amazon.com, Inc. (NASDAQ:AMZN) has snapped up the rights to live-stream 10 NFL games next season for $50 million, or five times what Twitter Inc (NYSE:TWTR) paid for the 10 Thursday Night games the social media giant live streamed for 2016. Amazon will stream the games to its Prime customers in hopes that more people will sign up for the service.

The market originally had high hopes on Twitter’s NFL live stream experiment, as it was seen as a possible way to monetize Twitter’s audience. As opposed to Facebook, Twitter has struggled to turn solid profits and the hope was that the live-streams could reignite audience engagement and help Twitter make money through video ads. With today’s Amazon news, it seems that the cost of NFL live-stream content has gone up, making Twitter’s live-streaming of America’s most popular sport less profitable in the future (if the media giant does so again).

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Smart money sentiment in Twitter has been less bullish. Of the 742 elite funds we track, 41 funds owned $547.87 million of Twitter Inc (NYSE:TWTR) and accounted for 4.70% of the float on December 31, versus 47 funds and $1.08 billion respectively on September 30.
The Bottom Line

Twitter Inc (NYSE:TWTR) shares likely dropped today due to the news that Amazon will live stream 10 NFL games next season. Given that the cost of streaming those games has gone up 5 times, the NFL streaming route for Twitter looks less likely as a way to monetize the social media giant’s audience. For more reading, check out ‘10 Countries with the Most Facebook, Twitter and Instagram Users‘.

Disclosure:None

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