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Sometimes the numbers are enough by themselves:
Facebook users: 1.28 billion
Twitter users: 645.75 million
LinkedIn users: 277 million
Facebook PE: 78
Twitter PE: -13.74
LinkedIn PE: 924.25
Facebook YTD return: 12.27%
Twitter YTD return: -27.8%
LinkedIn YTD return: -18.96%
Although it made a profit last quarter, Twitter’s income was so small as to be barely noticeable.
Twitter’s user growth appears to be slowing too, which means fewer people seeing the ads that actually appear on the platform. Here’s where LinkedIn is actually doing better – its broader revenue streams (from ads, job-seeking and subscription elements) mean that it has a more diverse base to build upon. By contrast, Twitter is reliant on only one stream of ads. If the global marketplace for advertising begins to consolidate, major players will focus on big platforms like Facebook, leaving Twitter out in the cold.
In the light of their results, it looks as if both Apple and Facebook investors had become unduly negative about the future for their companies. For Twitter, however, the post IPO slump is rather more justified. This is a company with serious questions about how it is going to monetise its growth outside North America, and how it intends to maintain user growth.
Facebook is overvalued, and LinkedIn even more so, but Twitter is still not a fully-proven ad platform. The upcoming quarterly figures need to turn that perception around, or the post-results lockup expiry on 5 May could see a fire sale of Twitter stock by employees.