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How to buy, sell and short Twitter shares

Twitter is one of the most popular social media platforms today – with more than 320 million active users. Get an in-depth view of the company and find out how you can get exposure to its shares with IG Bank.

Twitter shares Source: Bloomberg

How to buy Twitter shares

If you want to buy Twitter shares, you can choose derivatives trading, e.g. CFDs). With CFD trading, you can go long on the share price without owning the underlying stocks.

Read more about CFD trading.

How to sell Twitter shares

You can sell your Twitter shares if you think it’s time to realise a profit, or if you want to avoid a further loss.

Understanding Twitter: a brief history

Twitter, originally called Twttr, is a social media company founded in 2006 by Jack Dorsey, Biz Stone and Evan Williams. By 2007, it was already attracting thousands of users at a tech conference in Texas. This was the same year that Twitter released its mobile site.

Over the next few years, the Twitter user base grew at an astounding pace – garnering 6 million users by 2008. This figure tripled by the following year (18 million), and again by 2010 (54 million). The number of ‘tweets’ sent over this time increased from less than one million a day to more than 45 million.

Between 2010 and 2011, Twitter launched a host of new features, including promoted accounts, a link-shortening service and a music app. It filed for a stock market listing in September 2013, making its debut on the New York Stock Exchange in November 2013. Between 2014 and 2017, Twitter acquired quite a few businesses, including the popular video streaming app Periscope. One of the most significant developments of 2017 was the increase in the number of characters allowed for tweets – from 140 to 280.

Twitter is still one of the forerunners in the world of social media, with more than 320 million users and $3.36 billion in revenue for the 12 months ending September 2019.

Twitter shares: the basics

Twitter shares listed on the New York Stock Exchange (NYSE) in 2013, under the ticker symbol TWTR. Today, it is also listed on the Nasdaq (US Tech 100 with IG). The IPO was a huge success – with 70 million shares floating at $26 each, and stock closing the first trading day at $45 a share. Shares were rising in popularity, crossing the $65 mark by the end of 2014. However, Twitter’s growth was slowing down, and investors became nervous about the stock.

By mid-2015 Twitter’s CEO, Dick Costolo, stepped down amid criticism about his strategies. This was the event that pushed the Twitter share price over the edge, dipping below its 2013 IPO price. In September 2016, rumours of a possible takeover by Alphabet, Microsoft and Walt Disney, to name a few, caused the share price to climb from $18 to $23. The Twitter share price continued to display volatility over the past three years, varying between $14 and $45.

Buy Twitter shares’
Buy Twitter shares’

Twitter key personnel: who manages the company?

The following people are on Twitter’s managing team:

Jack Dorsey Chief executive officer
Ned Segal Chief financial officer
Vijaya Gadde Lead counsel
Parag Agrawal Technology lead
Leslie Berland People and marketing lead
Kayvon Beykpour Product lead
Dantley Davis Head of design and research
Matt Derella Customers lead
Bruce Falck Revenue product lead
Michael Montano Engineering lead

What is Twitter’s business model?

Twitter’s business model is based on similar principles to most social networks. You can create your own Twitter profile and then post short updates, or photos and videos, for your followers to see. The platform also has a messaging function.

Twitter’s value proposition is multi-faceted. It offers users the opportunity to share and receive real-time content, gives advertisers the benefit of global reach, and offers data partners unique insights.

Most of the company’s revenue is made from advertising, including banners and video ads on the platform. While ad revenue is important, it is continually looking at other ways to strengthen its business model, such as solidifying new partnerships.

Twitter fundamental analysis: how to analyse the Twitter share price

Fundamental analysis is an important step in examining Twitter’s share price. Various factors make up fundamental analysis, namely the financial performance of Twitter as a business, its share price and any management changes. Remember to compare these factors with other companies in the same industry to get a complete view of Twitter’s performance.

Some of the metrics you can use to determine the value of Twitter shares include earnings per share (EPS), price-to-earnings (P/E), return on equity (ROE) and dividend yield.

  • Earnings per share can help you establish if Twitter is profitable. To calculate EPS, divide the company’s profit by the number of outstanding shares
  • Price-to-earnings tells you how much you have to spend on Twitter shares to make $1 in profit. To calculate the P/E ratio, divide the company’s market value per share by its EPS
  • Return on equity measures how much income Twitter makes from its assets compared to shareholder investments. To calculate ROE, divide the company’s net income by stakeholder equity
  • Dividend yield is Twitter’s annual dividends compared to its share price as a percentage. To calculate dividend yield, divide the dividend amount by share price and multiply it by 100. Remember that Twitter has not yet paid a dividend at this stage

Find out more about fundamental analysis here

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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