NYSE: TWTR Jason A. Moser презентация

Why buy? We are witnessing a massive global shift to social media and mobile communications. The coming decade for the big names in social media will be all about engagement. Twitter’s real-time mobile platform and suite of apps is a trusted form of communication for media outlets and users around the world.

What is Twitter? Twitter is a global communication platform open to anyone with an Internet connection. Tweets are limited to 140 characters and possess a real time dynamic that places the user exactly where they want to be.

What is Twitter? “Twitter is the operating system of news. News organizations were the first to really understand the value and the power of Twitter. They joined Twitter not just as a place where they could break news, but as a place where they could source news and confirm news.” “Ultimately the goal is to reach every person on the planet.” Katie Jacobs Stanton, Twitter VP of Global Media

The mission

User growth

The move to mobile

A suite strategy

Market opportunity

Focus on the top line

Twitter’s core vertical markets today Television Sports Music News Elections Fashion (emerging area)

This is your second screen

Breaking Bad versus The Big Bang “Around 10 million people watched the finale of Breaking Bad; compare that to the The Big Bang Theory, which nearly doubled Breaking Bad's audience with 20.44 million people. Breaking Bad did not even make the top 20 in terms of TV viewers, but the Big Bang Theory was nowhere to be found on Twitter. It's like these two shows exist in entirely different universes, despite being shown on the same medium.”  http://vator.tv/news/2013-10-07-breaking-bad-wins-first-nielsen-twitter-ratings

Nielsen Twitter TV Ratings Improve media planning and buying decisions by factoring in the total Twitter engagement around TV programs. Measure effectiveness of Twitter TV engagement strategies by providing insight into who was actually reached. Identify true influencers – people whose Tweets are actually read by large audiences.

Nielsen Twitter TV Ratings

Twitter Amplify

How Amplify works Exciting content is broadcast on TV or other media channels. Sports, news, entertainment…virtually any vertical. Real-time videos or photos are prepared for Twitter. Short, high impact content from media partner (ESPN for example) shows along with a 6 second ad pre-roll from customer (McDonald’s, Verizon, etc.). Sponsored premium content is delivered to targeted audiences. These audiences go beyond just those who may or may not follow the content provider (organic followers). Feature of this product is the Twitter video card which brings the media into view with a one-tap playback and video analytics.

Case study

Pieces to put together Fabric: Twitter’s modular SDK (software developers kit); tools for developers to build apps and ecosystems. Syndication: Taking Twitter’s content beyond the core platform and to partners like TV networks, websites, etc. Commerce/Payments: Exclusive NFL Draft Day Jameis Winston jersey experiment, more like this will follow. Video: Periscope, Vine and video taken in the platform could be major drivers in the future (particularly Periscope). Data, data, data: Acquisition of Gnip, partnership with IBM, etc. Value of data these networks offer is still being realized.

The Value of Data "When we work with studios, we have data on 3 million blogs, YouTube, Disqus, WordPress; we account for conversation on all those platforms as well as Wikipedia page views. Each of them adds value. But Twitter is the kingpin and offers the most value.“ Jaime Brugueras, VP analytics, Networked Insights

The Value of Data “Twitter provides a powerful new lens through which to look at the world – as both a platform for hundreds of millions of consumers and business professionals, and as a synthesizer of trends. This partnership, drawing on IBM’s leading cloud-based analytics platform, will help clients enrich business decisions with an entirely new class of data. This is the latest example of how IBM is reimagining work.” Ginni Rometty, Chairman, President and CEO, IBM

The age of consolidation Since going public in November 2013 Twitter has made approximately 19 various acquisitions in order to enhance its capabilities and reach.

Management Dick Costolo CEO 10/2010 COO 9/2009 to 10/2010 Co-founded FeedBurner in 2004 which was acquired by Google in 2007.

Understanding future worth

Margins will matter Long term gross margin target high 70%. EBITDA margin target 40% - 45%. How do they look today? 1Q2015 Gross margin 67.1% vs 65.9% year ago. 1Q2015 Adj. EBITDA margin 24% vs 15% year ago. This capital-light and scalable business model supports high margins. In time Twitter will achieve profitability.

Understanding future worth Cap IQ estimates imply 40% CAGR from 2014-2019. Balance sheet is strong with ~$2 billion in net cash. Is Twitter “overvalued” today? Assuming Twitter hits $7.8 billion sales in 2019 as estimates imply, what would the market pay then? 5X sales? 10X sales? At 7X sales you have a $56.4 billion market cap, 130% up from today’s number of $24.5 billion. Is it worth trying to peg a specific price in the future? We could be fantastically wrong in either direction.

A look at today

Using stock as currency

Things can go wrong Leadership: Wall Street questions, however management continues to do what they say they’re going to do. Competition: Nobody is immune. Engagement: Getting them there is one thing, keeping them there is another. Users: While 302M MAUs is impressive, it better grow. Monetization: If Vine and Periscope fail to meaningfully contribute we’ve got problems. Target: There seem to be constant rumors of acquisition which, real or not, could result in significant volatility. Acquisitions: If all of these little bolt-on acquisitions fail to help Twitter ultimately grow sales, it could be painful.

This will be a bumpy ride

Bottom line for investors Twitter is NOT a stock that you want to buy all at once. Twitter IS a stock in which you want to build a position over time. Twitter is more than just a niche communication platform. It’s a tech company with a tremendous amount of valuable data. The biggest challenge investors face with Twitter today is the unknown. Where will this business be in five years? This is a headline stock today, the market loves to punish it when it misses Wall Street’s expectations. Foolish investors should focus less on Wall Street’s expectations game, be patient, make sure management does what they say they’re going to do. Investors who can’t plan on owning these shares for at least the next five years shouldn’t buy them at all.

Can you take this leap?