Tuesday, October 28, 2014

Twitter's big year: TWTR 2014 in charts

If you follow Finance Trends on Twitter, then you've probably heard me talk about our favorite social media company and its stock (TWTR) quite a bit over the past couple years. 

However, this will be our first (!) post on Twitter's stock performance here on the website. Now that Twitter has reported 3Q earnings, it's a great time to look at the charts and see where TWTR has been in 2014, and where it may go from here.

Let's cut to the chase. Here is a newly updated chart (click to enlarge), showing today's price action post-earnings. 

Twitter TWTR stock price chart

TWTR gapped lower after last night's disappointing EPS report, opening near $42 today. Although TWTR managed to move higher during the day, the price action, as viewed from the daily chart, is rather bearish. The stock is now trading below its 50 and 200 day moving averages and it has moved lower the last 2 days on heavy volume.

Update: TWTR is now down 31% year-to-date while its rival, Facebook (FB, which reports earnings today), is up 48% YTD.  

Facebook Twitter performance charts FB vs. TWTR
FB vs. TWTR charts via Finviz.com

After a poor showing in its first year after IPO, FB turned things around and has steadily moved higher, leaving TWTR in the dust.  

Facebook FB stock chart

Although Twitter's revenues are climbing, with large growth in mobile ads and data licensing, Techcrunch feels the company will need to pair those gains with stronger user growth: 

"[Twitter] has a history of beating on its financial goals, and missing, or disappointing on user growth. Twitter has done an excellent job at monetizing its user base, in other words, but has had a harder time growing the base itself.".

But as Twitter co-founder Ev Williams likes to reminds people: 

"Twitter isn't a social network, it's really an information network."

Will Twitter be able to engage new, "secondary" users through TV and apps that embed tweets in their content? Only time will tell. For now, the bearish price action is telling me to find other trading opportunities on the long side.   

Long-time Twitter followers know I've also been bullish on TWTR in the past. However, the current price action is telling me to avoid the stock for now.


As a long-time Twitter user and observer, I've been alternately bullish or bearish on the company's platform and its stock. We can wish Twitter the company a bright and profitable future while taking an indifferent or bearish stance towards the stock. As of now, I have no position in TWTR. At some point in the future, if the stock bases and begins to move higher, I may turn bullish again.

Disclosure: I have no current position in FB or TWTR

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