We're Feeling Better About Twitter
By Jim Cramer and Jack Mohr | 06/12/15 - 01:11 PM EDT
Stocks in Focus: TWTR
After last night's announcement that CEO Dick Costolo will be stepping down, with co-founder Jack Dorsey becoming interim CEO at the end of this month, we have renewed confidence that Twitter (TWTR:NYSE) will finally be able to get closer to realizing its platform's vast potential.
We think the board will look both internally and externally for a leader that either has run large media organizations or has deep product experience. Twitter's Chief Revenue Officer Adam Bain stands out most prominently from an internal standpoint, while the external candidates we have heard analysts discuss include Ross Levinsohn (former Yahoo! CEO), Kevin Systrom (Instagram founder), Evan Williams (Twitter co-founder and Medium CEO) and Mike McCue (former board member and Flipboard CEO).
Near term, we still have a bearish outlook as MAU trends appear poised to decline quarter over quarter. Longer term, however, we are now even bigger believers in the opportunity in front of Twitter, as it is a unique platform with an enormous addressable market. The company's long-term success, in our view, will be dictated by 1) accelerating product innovation; 2) capturing its massive pit of logged-out users; 3) optimizing targeting while convincing advertisers of a clear, compelling ROI; 4) re-engaging the nearly 700 million users who have dropped out; and 5) reducing the complexity and confusion that many new users experience. We are adamant that this stock is not for those with a short-term mindset, nor the faint of heart. We reiterate our $52 target.
Regards,
Jim Cramer, Portfolio Manager & Jack Mohr, Director of Research - Action Alerts PLUS
DISCLOSURE: At the time of publication, Action Alerts PLUS was long TWTR.
jmho, John
