Resignation of Twitter (TWTR) CEO Costolo Not Surprising Given Growth, Engagement Challenges - Cowen

Cowen and Company affirms Twitter (NYSE: TWTR) with a Market Perform rating and $38 price target following the resignation of Dick Costolo as CEO.

Analyst John Blackledge commented, Overall, we are not too surprised by the change in leadership, given user growth and engagement challenges. We view Mr. Costolo as building a strong management team and driving needed product changes, like simplifying the sign-on process and other features ("while you were away"). There is more work to be done on the product offering to drive engagement and user growth, as well as work on building or partnering on the advertising side to effectively compete vs existing and emerging Social/Digital platforms and continue fast-paced topline growth. The stock was initially up 10% after hours off the news and retraced initial gains likely given affirmation of 2Q15 guidance and soft MAU trends.

For an analyst ratings summary and ratings history on Twitter, Inc. click here. For more ratings news on Twitter, Inc. click here.

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