How to buy, sell and short Twitter shares

How to buy and invest in Twitter shares

If you want to buy Twitter shares, you can choose between share dealing and derivatives trading (spread bets and CFDs). With share dealing, you can buy and own the physical shares, but with trading, you can go long on the share price without owning the underlying stocks.

Not sure which option is best for you? Read more about the difference between trading and investing.

How to sell and short 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. There are two ways to do it, depending on whether you own the physical shares or if you are speculating on share price movements.

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.

Twitter key personnel: who manages the company?

The following people are on Twitter’s managing team:

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

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