For quite a while now, Twitter has been seen as the social network of choice for most investors. With real time news and signals all available on a social dashboard; investors have found quite a bit of value in using the social network. However, the positive views investors have of Twitter seem to be fading as they start to find more and more alternatives available. On Monday, the stock took another big hit on the data surrounding this topic. So today, we'll talk about Twitter's relationship with investors, why investor user growth in Twitter is slowing, and how it's likely to affect the company's stock moving forward. So, let's get right to it.
Brunswick Group 2015 Global Investor Media Survey Raises A Big Red Flag
On Monday, the Brunswick Group released their global investor media survey results for this year's survey. For complete details, click here. What the survey showed proved to be incredibly concerning to many investors. The survey results showed that Twitter had absolutely no growth in use among financial professionals over the past three years. 28% of investors who answered the survey said that they use Twitter when making investment decisions; the same amount we've seen for the past three consecutive years. On top of the stalling growth in use among investors, twitter statistics are actually going backward when it comes to using the site to “launch the construction of an investment decision,”. In this area, only 13% of respondents provided a positive response; down from 14% last year.
Why Twitter Is Struggling With Use Among Investors
The bottom line is that in the past, Twitter was the only competitor in this space. While there were other social media options out there; none seemed to fit the investor quite as well as Twitter. However, the landscape with regard to investing social media is changing rapidly. As a matter of fact, the term social investing is now used relatively often. These days, investors have systems like Stock Twits that are directly focused on investing and trading; making it easier to find and track opportunities in the social atmosphere. So, while Twitter continues to be a strong option, there's quite a bit of competition for the company in this space today than there was in the past; leading to a plateau in growth among investors.
How This Is Likely To Affect Twitter's Stock Moving Forward
As with any bad news, this news is likely to keep the stock in the midst of the downtrends it's been facing recently. The reality is that this is another big red warning flag with regard to Twitter's ability to grow their audience. Recently, we've seen user growth and retention numbers near zero in all categories; not just among investors. However, the company has been working hard to pick these numbers up since the last report we saw. Unfortunately, the survey we saw on Monday shows that as of yet, there's no improvement in the search for a solution to Twitter's biggest problem! So, as a trader, continue to expect more and more downtrends. At some points, you'll see slight spikes before the overall downtrends continue rolling. Wait until these spikes hit resistance and execute your put option to take advantage of the downtrends to follow.
What Do You Think?
Where do you think Twitter is headed and why? Let us know in the comments below!