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Twitter Inc (TWTR) Failing Under Dorsey – Stock Down 60% Since Costolo’s Exit

jack dorsey twitter inc TWTR

Twitter Inc has been struggling to attract new users, impress existing users, and investors are losing faith. The social media company, which started its journey in 2006, reported disappointing numbers for the first quarter. Its revenue failed to meet Wall Street’s expectations for the quarter. Dick Costolo stepped down from the company in last June and co-founder Jack Dorsey took charge as CEO to save the sinking ship. Shareholders were hopeful that Dorsey would improve the company’s performance and its stock. But it’s been a year since Costolo’s departure, nothing has changed at the company. The stock has lost 60.95% during the past 12 months.

Dorsey, who also is CEO of the mobile-payments company Square, has been trying to get the company on track this year. He introduced some changes to the company including removing its 140-character limit and a new feature called Moments to allow users to follow live events and topics. Additionally, the social media company signed an agreement with the NFL to stream Thursday night football games.

Twitter Sale “Inevitable” If Struggle Continues

In addition to its struggle to gain new users, Twitter Inc has been hit hard with a string of executives leaving the company. Last month, the social media company confirmed the departure of its two key executives. The company’s stock has also been struggling, and it could set a new 52-week low. The stock closed near an all-time low at $14.02 on Friday. The company’s market capitalization was about $23.5 billion when Costolo announced his departure. It’s now below $10 billion, Recode reported.

“Costolo’s departure was applauded by fed-up investors who were sick of watching Twitter’s stock slide. And Dorsey’s appointment was greeted with hope that he would quickly turn around the product and, by association, the stock price. But that has not happened. In the year since that announcement, Twitter has simply remained Twitter — a company plagued by a lack of continuity on its executive roster, a failure to get its product into more consumer hands and an inability to tell a convincing story to Wall Street,” the publication said.

Bob Peck, an analyst at SunTrust Robinson Humphrey, believes that Twitter doesn’t make any progress, a sale appears “inevitable” next year. Potential buyers include Google, Facebook, and Apple, Toledo Blade reported.

“We want to underscore that we do not think the company is up for sale in the near term,” the analyst wrote. “However we believe that if current trends persist, Twitter would be a top candidate in 2017.”

Twitter Losing Executives

Jana Messerschmidt, the head of business development, and Nathan Hubbard, head of media and commerce, are leaving the social media company, which confirmed their exit last month. Messerschmidt has been working at the company for six years. During this time, she handled all of the company’s relationships with outside partners, including Google. Messerschmidt is part of the #Angels investing team, which was formed by current and former female Twitter executives. The investment group bets on interesting tech startups. Hubbard is leaving Twitter to start his own company, according to a former colleague.

Hedge Funds Bet Big On Company

Howard Marks’ Oaktree Capital Management, Jim Simons’ Renaissance Technologies, Israel Englander’s Millennium Management, and David Shaw’s D. E. Shaw & Co. are betting big on Twitter, according to latest 13F filings. Oaktree Capital, Millennium Management and D. E. Shaw raised their stakes in the company, while Renaissance Technologies started a new position in the social media company during the last quarter.

Shares of Twitter Inc has lost 16.6% during the past three months.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.