Twitter Inc (NYSE:TWTR) stock lock-up period ends today May 5 and employees might start selling their stocks which may cause the stock to fall.
It might. However, only if employees and other shareholders who have been restricted by the lock-up period do not understand Twitter’s real strength and start selling their stocks by the numbers.
Everybody is talking about Twitter’s growth problem and that its user base is growing slowly only 25% to 255 million users verses 30% growth the quarter before.
Most people and analysts alike make the fundamental mistake of comparing Twitter to Facebook. Some even requested Twitter to “be like Facebook”.
Facebook Inc (NASDAQ:FB) is a social network where people can connect with each other and even chat and post pictures for their friends to see.
Twitter Inc (NYSE:TWTR) is not really a social network, but more of a social “media” platform or even a news media, service platform. This is where people tend to make the mistake thinking growth and user engagement of Facebook hence coming hard on Twitter.
Most look at Twitter’s growth rate and direction by the number of users logging in every month and the number of timelines they view. Compared to Facebook, Twitter may never have the same number of users as Facebook. Unless you have an account and login to Twitter.com, you won’t be able to see timelines or advertisements.
This is changing. Twitter.com home page is changing and the acquisition of MoPub enables Twitter to get revenue on ads shown to people not even logged into Twitter.com just on third-party mobile apps. Analogous to Google’s Adsense? You don’t have to be logged into Gmail or any of Google’s services to see Adsense ads on websites.
Twitter, being a social media platform, has the advantage of connecting companies and advertisers with their users in a “one-way” connection if you will. Meaning, you could have many followers and not necessarily following anyone and be able to tweet news to your followers. This is powerful, along with your tweets, you can attach ads.
In my opinion, Twitter is a much better platform for companies to advertise and reach people and based on the direction of changes by Twitter so far, I think we will see their home page transformed into some type of news media platform where every one can access, read news and see ads.