Twitter: 1 Year After IPO

Investors growing impatient as Twitter growth story stalls.
6:32 | 11/07/14

Coming up in the next {{countdown}} {{countdownlbl}}

Coming up next:



Skip to this video now

Now Playing:


Related Extras
Related Videos
Video Transcript
Transcript for Twitter: 1 Year After IPO
And Dan Butler new York and as a financial markets close on Wall Street for Friday with a weak November 7. The story stock. So one year ago today street was all a Twitter over the long awaited IPO once trading began. While investors were gobbling up Twitter with an offer price of 26 dodge share and it opening pop of 4510. But. Well what a difference a year makes if you bought at 45. Well you're down over 10% after today's clothes so to get the full story behind twitters first year as a publicly tree company. Want to bring in Steve Cortez founder of air crews LLC in Chicago Steve thanks for being with us. So a year ago today thank you for having me Wu well that they severe so we we bullish on Twitter or not by the story. No it you know funny you ask a year ago today I was actually on ABC talking about is very company and is very stock. That time I warned investors to be where I said hash tag bubble. Might be the way to will describe this stock and I don't actually think it's a bubble I was trying to be a bit funny but I don't think it's a good investment I didn't think so then. And I don't think so now and for the most part of the stock's been all over the place op as far 75 all lead down to thirty but for the most part it's been more down than up. I and it has punish investors and by the way that's over a period during a last year with the overall market has actually support so the S&P 500 Dow Jones industrial have done very well also for the most part if you've been invested in stocks of the last year you've had a two traffic here. But not so on Twitter look I think Twitter. Is a terrific company I am. A very frequent user of Twitter right tweet out a lot I get tremendous information. Both serious stuff that I use for my business as wells a lot of entertaining. Om and just enlightening stuff so I think twitters a fantastic. Product that doesn't mean it's a great investment because Twitter has not so format Wall Street's expectations in terms of actually making money. But that this Brit is an and it we've had these discussions before is that a rather terrorism benchmarks are there to compare trimming. You can look at FaceBook you can look at Linkedin and they're kind of social media. But what you know I I guess the question is what is basically wrong with the company has and a lack of product innovation. You know I think so and it you and you write it it it's hard here when you're talking about these these new digital companies. Two to talk about comparable these difficult. I think the closest comparable here though is probably FaceBook and really I think one of the reasons the stock has offered that Wall Street has punished Twitter is that FaceBook for the most part has dominated a mobile. And people didn't think that a year ago when Twitter offers debuted there was a lot of excitement because Twitter at that time. Was doing so well a mobile and FaceBook seem to be stoned and a little bit and in mobile but FaceBook has really figured that out. And I think part of that is reflected just in total users if we just look at the universe. While Twitter is a huge platform. Still FaceBook right now is about five times bigger in terms of whole users well north of a billion people. Using FaceBook where is twitters I think about 260 million or so and and the other thing is is. Twitter is a stock and Barley so his FaceBook a lot of these sort of sexy glamour stocks these stocks are priced. For a ton of growth going forward because they don't have very big earnings yet so to Wall Street is banking on a lot of growth in the future of the problem with Twitter and the one of the reasons I think the stock prices reflecting this is that new user growth. Is slowing dramatically and that's bop and something you wanna see. When he stock is already very expensive. Twitter cost over a hundred. Times on a PE price to earning ratio that's into the Wall Street uses. To gauge how expensive the company as the market as the whole. Right now trades roughly seventeen times price to earnings Twitter all were a hundred look in next year's crop projected earnings so it's an expensive company because of that. Wall Street really expects per faction. And so far they're not given out Twitter we're talking about the leadership of the company that because obviously as investors they always want to find out exactly who they can put a Blaine who they can put a face to on all of this a CEO Dick still low. He's been under fire for all this that. I mean is he still the right person for the job. You know I. And I don't know enough about him to really give you a lot of inside on him as an individual I will say this. There's been far too much turnover among the top ranks of Twitter and again I think that's another thing that makes investors nervous when you have a company. That is growing this rapidly and it is growing Alameda to sound too bearish on Twitter and again I I would absolutely love the product and I think has been transformational Billy adult love about a by the way down by my wife teases me about this. I history a lot more books not read Twitter. Had hundreds of problem for my intellectual life for the light in my mind but it's it's easier in Mauritania permitted to go to Twitter read the impeccable book. At night but in any case getting back to the the leadership of the company. His to the CEOs top five. Direct. Colleagues have been replaced all five of them. Just over the course of the past year so there's ignite a lot of turnover within the top ranks Twitter and I think that's a problem on not what's going on internally I don't know I don't think anybody knows except for those. People but clearly the market doesn't like to see that kind of turn over amidst the top ranks of the company right well assembly and listen Steve to your defense and a 140 character is a lot easier to pick up in a 140 pages in a book so. I can understand extra height. I can at a senate is a lastly The Who what can Twitter do especially to get growth back on track. You know I think they need and they are doing some some innovative things again I don't want some too bearish you know I I don't like the stock. As an investment but that to me the most fascinating thing they're doing is called my hope Bob. On and I think that's where they're allowing a lot of the advertising dollars that that company spent to be far more me uniquely tailored to the user experience and so. I think that they are behind FaceBook in that regard. In mobile and mobile advertisers want a few advertising areas that is exploding. Advertising in general somewhat challenged right now protecting traditional type of advertising. But mobile digital is really the future there and so they are doing some innovative things there that company to push that envelope. Further and to your point about leadership they need some stability they need folks to stick around. They need to make sure they've hired the right people and make sure that that they have a team that is going to appear to the outside world to be unified there. We shall see if there call that in by Steve Cortes from Veracruz LLC Steve got to pick yourself a book this weekend. Have to fix day I appreciate it have a good one. Of course you've been watching this story stock stay with ABC news dot company latest headlines I'm Dan where in New York.

This transcript has been automatically generated and may not be 100% accurate.

{"duration":"6:32","description":"Investors growing impatient as Twitter growth story stalls.","mediaType":"default","section":"ABCNews/Business","id":"26767460","title":"Twitter: 1 Year After IPO","url":"/Business/video/twitter-year-ipo-26767460"}