Twitter Gains After Evercore Projects Faster U.S. GrowthSarah Frier
Twitter Inc. shares gained 5 percent after Evercore Group LLC said the microblogging service could accelerate growth in its U.S. user base.
Twitter rose to $41.44 at the close in New York, its biggest jump in four weeks, according to data compiled by Bloomberg. Even with today’s climb, the stock is down 35 percent so far this year, amid investor concerns that user growth is slowing for the San Francisco-based company.
Evercore said there is a strong possibility the company will add users faster in the current period than it did in the first quarter. Total membership rose 25 percent in the first quarter, down from 30 percent growth in the previous period, Twitter reported in April. Twitter, a popular platform for comments during live television shows, said millions of tweets are being sent during Soccer’s World Cup. Brazil’s match against Croatia during the first stages saw 12.2 million postings, the company said last week.
“Easing user growth comparisons, combined with strong engagement driven by the World Cup in June, lead us to expect domestic user growth re-acceleration,” Ken Sena, an analyst at Evercore, wrote in the report. He rates the shares the equivalent a buy with a price target of $48.
Twitter’s growth struggle was also seen as one of the reasons for the departure of Ali Rowghani, who resigned as Twitter’s chief operating officer earlier this month. Rowghani wanted to keep control over Twitter’s product vision, as well as operations and corporate development, setting up a clash with Chief Executive Officer Dick Costolo, who decided to have more of those functions report to him, people with knowledge of the matter have said.