Thank you very much;
you're only a step away from
downloading your reports.
Twitter: What Metrics?
Twitter reports second-quarter earnings after the close today, and there is potential for mass confusion.
Michael Comeau    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Twitter (NYSE:TWTR) seems very, very hard to game ahead of earnings.

It's in a metrics mess and the second quarter looks like one big ball of confusion for two reasons.

The first is the World Cup, which may have boosted both the monthly active user count and engagement. Twitter has a problem in retaining users, and a beat in the MAU count may actually be ignored by investors, who may assume these people came and went with the World Cup.

Meanwhile, if the number is bad, the argument will be "Twitter is so not mainstream that it couldn't even generate real growth during the World Cup!". 

Unfortunately, Wall Street is fixated on unfair comparisons to Facebook (NASDAQ:FB), which has been more widely embraced by the general public. Facebook is also still showing phenomenal growth in users, even past the 1-billion mark.

Current forecasts for MAUs appear centered in the 260-270 million range.

And the second issue is the rumor that Twitter may unveil some kind of new metrics system revolving around the reach of Twitter beyond the core platform. Recode.net is denying the speculation, but it's in investors' minds nonetheless.

If Twitter goes this route, it will be playing a very tricky game. It will have to shift the conversation away from the core metrics it has provided since it came public without making it look like subterfuge.

The worst possible scenario would be Twitter missing on big metrics like revenues and MAUs while focusing on some amorphous engagement calculation

Right now, perhaps the best thing Twitter has going for it is all the confusion.

It feels like everyone's afraid to dip in because of fear of a poor reading on the user metric, as well as confusion over how the metric will be read. What if we see very strong revenues but weak user numbers? Or vice versa? Lots of moving parts here.

I'm wondering if the current confusion is an opportunity.

One final thought -- the at-the-money straddle is implying about an 11% move in Twitter stock by the end of the week. That seems a little conservative.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Twitter: What Metrics?
Twitter reports second-quarter earnings after the close today, and there is potential for mass confusion.
Michael Comeau    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Twitter (NYSE:TWTR) seems very, very hard to game ahead of earnings.

It's in a metrics mess and the second quarter looks like one big ball of confusion for two reasons.

The first is the World Cup, which may have boosted both the monthly active user count and engagement. Twitter has a problem in retaining users, and a beat in the MAU count may actually be ignored by investors, who may assume these people came and went with the World Cup.

Meanwhile, if the number is bad, the argument will be "Twitter is so not mainstream that it couldn't even generate real growth during the World Cup!". 

Unfortunately, Wall Street is fixated on unfair comparisons to Facebook (NASDAQ:FB), which has been more widely embraced by the general public. Facebook is also still showing phenomenal growth in users, even past the 1-billion mark.

Current forecasts for MAUs appear centered in the 260-270 million range.

And the second issue is the rumor that Twitter may unveil some kind of new metrics system revolving around the reach of Twitter beyond the core platform. Recode.net is denying the speculation, but it's in investors' minds nonetheless.

If Twitter goes this route, it will be playing a very tricky game. It will have to shift the conversation away from the core metrics it has provided since it came public without making it look like subterfuge.

The worst possible scenario would be Twitter missing on big metrics like revenues and MAUs while focusing on some amorphous engagement calculation

Right now, perhaps the best thing Twitter has going for it is all the confusion.

It feels like everyone's afraid to dip in because of fear of a poor reading on the user metric, as well as confusion over how the metric will be read. What if we see very strong revenues but weak user numbers? Or vice versa? Lots of moving parts here.

I'm wondering if the current confusion is an opportunity.

One final thought -- the at-the-money straddle is implying about an 11% move in Twitter stock by the end of the week. That seems a little conservative.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
More From Michael Comeau
Twitter: What Metrics?
Twitter reports second-quarter earnings after the close today, and there is potential for mass confusion.
Michael Comeau    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Twitter (NYSE:TWTR) seems very, very hard to game ahead of earnings.

It's in a metrics mess and the second quarter looks like one big ball of confusion for two reasons.

The first is the World Cup, which may have boosted both the monthly active user count and engagement. Twitter has a problem in retaining users, and a beat in the MAU count may actually be ignored by investors, who may assume these people came and went with the World Cup.

Meanwhile, if the number is bad, the argument will be "Twitter is so not mainstream that it couldn't even generate real growth during the World Cup!". 

Unfortunately, Wall Street is fixated on unfair comparisons to Facebook (NASDAQ:FB), which has been more widely embraced by the general public. Facebook is also still showing phenomenal growth in users, even past the 1-billion mark.

Current forecasts for MAUs appear centered in the 260-270 million range.

And the second issue is the rumor that Twitter may unveil some kind of new metrics system revolving around the reach of Twitter beyond the core platform. Recode.net is denying the speculation, but it's in investors' minds nonetheless.

If Twitter goes this route, it will be playing a very tricky game. It will have to shift the conversation away from the core metrics it has provided since it came public without making it look like subterfuge.

The worst possible scenario would be Twitter missing on big metrics like revenues and MAUs while focusing on some amorphous engagement calculation

Right now, perhaps the best thing Twitter has going for it is all the confusion.

It feels like everyone's afraid to dip in because of fear of a poor reading on the user metric, as well as confusion over how the metric will be read. What if we see very strong revenues but weak user numbers? Or vice versa? Lots of moving parts here.

I'm wondering if the current confusion is an opportunity.

One final thought -- the at-the-money straddle is implying about an 11% move in Twitter stock by the end of the week. That seems a little conservative.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
EDITOR'S PICKS
 
WHAT'S POPULAR