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Juhi Kulkarni
Juhi Kulkarni
Articles (282) 

Twitter Has Great Potential It Will Never Fulfill

Incompetent management will prevent Twitter from living up to its true potential

I have never been a fan of Twitter (NYSE:TWTR), both the website and the company. Although I realize the massive potential of a social media platform, I don’t think Twitter will ever live up to its hype and will always live in the shadow of Facebook (NASDAQ:FB). Twitter has drawn many comparisons to Facebook, but I think investors shouldn’t make the mistake of thinking that Twitter will execute a similar turnaround as Facebook. There are a few reasons for that.

Incompetent management

A CEO plays a big part in a company’s success and I always recommend investors to stay away from companies that have bad CEOs. For instance, SunEdison (SUNE), Yahoo (YHOO) and GoPro (NASDAQ:GPRO) have all struggled due to incompetent CEOs, and the same is happening with Twitter.

Obviously, I am not a fan of Twitter’s CEO, Jack Dorsey. He was fired from Twitter last year as he was painted as a bad manager who took credit for everything. While I did have hope from Twitter after the departure of Dorsey, the rehiring just goes to show the whole management is incompetent. 

Another company that rehired its incompetent CEO was Zynga (NASDAQ:ZNGA), and we all know how that turned out for both the company and investors. Though Twitter is trading just a little over all-time lows, I don’t see the company performing any better as long as the current crops of management are in charge.

On the other hand, Facebook has great management. Mark Zuckerberg has successfully monetized the platform, a feat that Twitter has not been able to manage. The difference in the management is reason enough for me to not look at Twitter from an investment point of view.

Conclusion

Apart from the incompetent management, Twitter is also operating at a loss. As my readers know, I have never liked companies that report consistent losses or have bad management. Twitter is a combination of both. Despite the fact that Twitter is trading about 40% lower from its IPO price, I don’t think it can be considered an attractive investment.

Twitter needs to find a way to monetize the platform in order to be considered a good investment option. As of now, I don’t see the current management pulling it off, which is why I would recommend selling the stock.


Rating: 2.6/5 (5 votes)

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