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Twitter Inc (NYSE:TWTR) Should ‘Monetize’ Donald Trump – Analyst

Twitter Inc needs to recognize the value of public figures such as Donald Trump engaging with audiences, and try to take advantage of this opportunity to increase its user base, James Cakmak, an analyst with Monness, Crespi & Hardt, wrote to clients.

Shares of Twitter have tumbled 37% in the last 3 months, as CEO Jack Dorsey struggles to monetize the micro-blogging site and make it easier for new users to understand. Twitter stock soared 7% on Monday amid market chatter of a possible deal for the San Francisco firm.

Twitter

Twitter Needs to Leverage Public Figures

James Cakmak has a $35 target price and a “buy” rating on Twitter stock. But given the buzz of negativity surrounding the firm, he says that reiterating the stock as a “buy” was “most challenging.”

“If Twitter can improve the product and deliver a more cohesive messaging of its utility, then the tides can turn,” he wrote.

Cakmak goes on to note that one of the key improvements that Twitter Inc could make is by simply latching onto the momentum that Republican presidential candidate Donald Trump’s tweets create.

“He has single-handedly kept Twitter in the news flow every single day,” Cakmak adds. “We contend Twitter should find a way to take advantage of this opportunity to serve as a new traffic vehicle.”

Cakmak thinks that Donald Trump’s hugely popular tweets underscore a very valuable part of Twitter – its ability to engage with public figures in an undiluted way. All Twitter needs to do is to place itself in the middle of these political debates to increase its audience base, he wrote.

Overall, Cakmak reckons that it would be best for Twitter to de-emphasize its role as a social platform. This can be done by improving the experience for logged-out users so that they can see top tweets – making it somewhat similar to a news site.

Twitter Q4 Earnings Expectations are Muted

Twitter will report fourth-quarter results on Wednesday, February 10. The recent exodus of several key executives has dented investor expectations going in to earnings day.

The consensus is for Twitter to record revenue of around $710 million. That would represent a healthy 48% jump on a year-over-year basis. Monthly active user count will also be on every investor’s radar when Twitter reports quarterly results.

Following the very unimpressive 1% sequential user growth in Q3, expectations obviously aren’t high. But investors will be disappointed if Twitter Inc doesn’t improve on its prior quarter figure.

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