'Time to Own Twitter (TWTR)' - Odeon Capital

Odeon Capital's Jahanara Nissar said it's time to own Twitter (NYSE: TWTR).

1. Engagement is high – That’s what matter for now. To me that speaks to a good product that is well integrated in society but remains a mismanaged Company - which can be fixed under the right leadership. What’s interesting about the user metrics is that a higher number of users are using it on a daily basis as DAU’s +14% YoY last qtr vs. MAU +2.8% YOY to 328M (+9M MAU’s). Twitter now has 5 consecutive quarterly increases in DAU. Thus, it seems like a trend is being formed. Users are the lifeblood of a social media service like Twitter and as long as that growth is there – it is key to the Co.’s turn around.
2. M&A play – As long as user engagement is there – it supports a potential take out. Who could buy them? Google is a possibility as it has a gaping hole in its Social Media Strategy and it’s time to step up as AMZN is taking over the World and Google can’t afford to let that happen. Google has ~ $88B in Net Cash (vs. TWTR’s $12.9B market Cap). Keep in mind that Google had explored a TWTR bid back in October in the $17-$18 range and that’s where the stock is now. Traditional Media Co.’s that are failing can also buy TWTR to establish direct relationships with the Consumer. AMZN’s deal with Whole Foods is indicative of how important the “Last Mile” is with Consumers.
3. It's become Trumps platform – It’s the ONLY platform you can get a direct download on what’s on the President’s mind (yes even at 3AM). It is becoming the main news source in the Social Media Landscape and live streaming is kicking in - 2.7M people watched live Comey testimony June 8th.
4. Advertisers need an alternative to FB & GOOG and SNAP has failed to fill that gap. SNAP’s DAU growth seems to have tapped out at 5% between 4Q16 & 1Q17. More importantly, SNAP hasn’t delivered the performance based kind of Ad campaigns That Advertisers want – Which FB & TWTR deliver.
5. The Swamp has been drained – With a mass exodus of top officers over the past year, new blood has slowly been filling in the ranks. Mark Cuban is on the board and he is known to keep everyone honest.
6. TWTR’s video streaming strategy is starting to take shape with at least 14 new and expanded content deals that will add hundreds of hours worth of exclusive content to the platform. Twitter plans to air live video 24 hours a day, seven days a week. With its Periscope live Video app introduced yesterday, Twitter is encouraging broadcasters to spend more time on the app as It is designed to keep broadcasters coming back to the platform.
7. The Co. is poised to take TV Advertising dollars. TWTR rolled out a 60 second Ad spot showing users how they can use its service,
8. Sentiment is very depressed and Numbers for the quarter have a very low bar.
9. Artificial Intelligence and Machine Learning are key initiatives and will help Twitter personalize content.

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