Twitter, LinkedIn Have Been Untangling: Kanji

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

April 30 (Bloomberg) -- Hussein Kanji, Partner at Hoxton Ventures, discusses the performance of both Twitter and LinkedIn. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

You are now quite perturbed by this drop-off in users.

Talk me through it.

You explained it so clearly to me in terms of the dramatic impact of the tail off in user growth.

Twitter's growth is about 10%, 11% on the user side.

We expected this would continue.

This has basically flattened out.

Just pull up the twitter user growth that we have their when we were talking to hans.

That shows that momentum we have had to rig it that is the basis of your model.

This user growth is what drives the revenue.

The problem is most of the growth in the stock is priced over the next decade.

We need 50% to 100% growth year on year in order to justify the valuation.

And this flattening is just going to quash that.

Exactly.

If you flatten out the user side and people stop using the product, it is going to be very difficult to achieve 50% to 100% revenue growth.

This collapse in the stock is mostly a function of the fact that people are saying, this year is good and their expectations are ahead but the next five to 10 years which is where the growth is priced in, is probably not going to be as healthy.

There is no real assurance from the twitter folks that this is going to deliver.

You are not giving me a real sense that i want to hold.

Linkedin, twitter, the whole thing, is it beginning to untangle?

It has been untangling for the last two or three months.

Maybe that is a baby step.

Are we ready for a bigger on wrapping up is going on?

The question is how bullish you are about this underlying growth.

Linkedin has the same problem.

User growth is flattening out and the price expectations have to be there to deliver on the revenue side.

Profit is not high and the stock has been crushed.

They are buying revenue, they are gaining revenue growth but the question is, what do you put as a price target for these companies?

In the case of twitter, it is even more fundamental.

It is still a very early stage business.

If you take a look at facebook, facebook into the market with the same concerns.

User growth is not flattening out as much.

Facebook figured out how to turn on mobile advertising.

They almost figured out a brand-new business and over delivered on this quarter after quarter.

Why can't twitter do the same?

I don't think people use twitter nearly as much as they use facebook.

If they could figure out the user problem, they could figure out the revenue problem.

When you and i had conversations about this, kids were dropping off facebook, there was a move away from facebook, they switched on mobile advertising, they got it right.

We don't talk about that anymore.

Because the mobile advertising business that no one had priced into the stock all of a sudden materialized.

Remember it is not this year's revenue growth, it is the next 10 years.

All of that is priced into today's price.

We are going to have to leave it there.

One huge question for your portfolio, will you believe in the forward revenue story?

Great to have you with us this morning.

Now after a four-year hiatus, british style icon kate moss is teaming up with top shop to unveil an exclusive range of clothes and accessories.

Here to tell us more about the business, style icon in her own right, caroline hyde.

Manus, you are too kind.

Behind me now, the doors are open on top shop's flagship store.

Many people rushing to work.

Don't see many rushing into the store right now.

I think it is the calm after the storm.

Last night, the crowds were

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change