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Buying Twitter stock (TWTR): a how-to guide
Getting famous and tweeting about diet pills isn't the only way to cash in.
In 2018 Twitter had its first profitable quarter, convincing many investors that now is the time to jump on board. But the company’s track record of losing money means that an investment is far from a sure deal.
Twitter’s recent stock performance
Take a look below at Twitter’s stock price performance over the past several months. Monitoring market performance is just one aspect of the research you should do before investing in a company like Twitter. Remember, past performance is no indication of future results.
Twitter’s technical performance
Technical analysis is the mathematical study of a stock’s price based on its recent trends. You have many more ways than the MACD to analyze market trends. Here’s what several key technical indicators are saying about Twitter’s current stock trend, according to charting service TradingView.
Twitter’s financial performance
Explore the table below to see how Twitter has performed financially over the last three years. Figures shown in brackets represent a loss.
|Revenue||$2.44 billion||$2.52 billion||$2.21 billion|
|Net income||-$108.06 million||-$456 million||-$521 million|
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Ways to stay up to date with Twitter stock
When buying or selling stock in a company it’s important to be aware of current affairs related to the company. Things to keep an eye on include:
- Financial reporting. These will let you know how the company is performing and will have a big impact on the share price. Twitter reports annually on the December 31st each year as well as quarterly throughout the year.
- Company news. It’s important to keep up to date on the company news — for example, is Twitter planning to make big changes to its platform? Is the company hiring/firing staff? Events such as these will have an impact on the company’s share price.
- Wider news. You should also be aware of other external events and news that may have an impact on Twitter’s share price — for instance, trends in other social media platforms.
- Does the company pay dividends? If a company pays dividends, it means it pay some of the profits back to shareholders. Currently, Twitter does not pay dividends on its shares.
- Shareholder meetings. These are often held annually and invite large shareholders to attend meetings and vote on matters relating to the company. It’s a good idea to know when these are, as they may hold importance over the direction of the company.
Things to consider before investing
Before investing in any company, research:
- What does the company do? Can you explain what the company does on a day-to-day basis in a few sentences? If you can’t, maybe you should go back to the drawing board.
- Is it making profits? If you’re not sure whether a company is profitable, this could be a warning sign. Read Twitter’s quarterly or annual earnings reports and take a look at the figures for yourself.
- Who are the main competitors? Every company operates alongside competitors. Before you invest you need to know if the company is the market leader, a newcomer or being pushed out of the market. If the company you’re considering investing in is global-facing, you need to keep an eye on the foreign competition, too.
- Who runs the company? Any decent company will list its senior managers. Even a cursory look at this can tell you something about the company’s stability and management style. If a company can’t seem to hold on to leadership, that can be a sign of trouble.
- Is the company’s position sustainable? If you’re looking for a long-term investment, look into whether the product or service the company offers will still be in demand in the future.
- Is there room for future growth? Linked to the question above, what is the outlook for the company’s medium- to long-term growth? Has your company reached its maximum size?
Twitter hasn’t been a profitable company in the past, but it looks like it might be on an upward trend. However, there’s no way to predict if that trend will continue, so you’ll have to decide whether or not investing in Twitter stock is a trade you’re comfortable with. If it is, compare your options for investment accounts.
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