Twitter's Leadership Change Unlikely to Set Stage for Monetization, Revenue Targets

Twitter’s Leadership Change Unlikely to Set Stage for Monetization, Revenue Targets

Microblogging giant Twitter is likely to achieve “progress” in meeting its goals of doubling sales through strong growth of monetizable daily average users rather than hit those targets following a change of top leadership, according to a research note from Wedbush.

The San Francisco, California-based group disclosed Monday that Jack Dorsey, its chief executive officer, will hand over the reins to Chief Technology Officer Parag Agrawal. Read more: Jack Dorsey Steps Down as Twitter Chief Executive

Dorsey ran Twitter alongside another publicly listed company, Square, which is a specialist payments firm. Agrawal has been at Twitter for more than 10 years, including as chief technology officer since 2017.

He has been responsible for scaling Twitter Ads systems and reaccelerating audience growth by improving Home timeline relevance, according to the note.

Twitter, which priced its initial public offering in November 2013 at $26 per share, closed at $45.78 apiece on Monday. During this same period, shares of its rival Meta Platforms (FB), formerly Facebook, have more than quadrupled.

Twitter’s internal targets are to expand its pool of monetizable daily active users by 20% to 315 million and double revenue between 2020 and 2023, Wedbush analysts Ygal Arounian and Chad Larkin said in the research note to clients after the market close on Monday.

“While the CEO change doesn’t necessarily specifically impact the ability to reach those goals, we look to see more progress there,” Arounian said in the note.

“Investors were expecting/hoping for an external candidate to take over that could bring in to Twitter an outside perspective and experience that would help it reach its user growth and revenue targets.”

The timing of Dorsey’s departure was not a surprise to Wedbush given “Dorsey’s overwhelmingly busy schedule and growing focus on fintech/crypto.”

The analysts said a “significant” recent effort particularly around product and technology improvement velocity, including features such as Topics, Spacing, Professional Profile/Shop Module, put into perspective why Twitter has gone with an internal candidate.

“Greater velocity has been intended by Twitter to be the key factor that improves its ability to more consistently see strong user growth” and monetization, Arounian added.

Wedbush lowered its price target for Twitter to $52 from $69 while maintaining a neutral rating. # Twitter’s Leadership Change Unlikely to Set Stage for Monetization, Revenue Targets