Without Donald Trump, Twitter Inc. could lose almost a fifth of its value.
That's the conclusion of Monness Crespi Hardt & Co. analyst James Cakmak, who said that the social media company would see as much as $2 billion in market value wiped out if @realDonaldTrump quit tweeting.
It's not that the president's defection would touch off a mass exodus, lowering the number of "monetizable" daily active users, Cakmak said in an interview. Instead, losing its most prominent user would hit Twitter's intangible value and lead to what's known as multiple compression.
"There is no better free advertising in the world than the president of the United States," said Cakmak, who has a neutral rating on Twitter shares.
While Twitter doesn't disclose the total number, Cakmak estimates daily users are around 125 million, about 30 percent fewer than Snap Inc. Twitter said in July that daily active users rose 12 percent in the second quarter, compared with the same period in 2016.
Trump has 36 million followers and has tweeted more than 35,000 times since joining the social media service in 2009.
Twitter's business doesn't face much risk from "potential diminishing political relevancy," Cakmak said in a note published Thursday. "What's most important is the execution of the right strategy, since at the present state we find Twitter not capitalizing on the opportunity that's in front of them."
Twitter shares have fallen 14 percent since Trump won the presidency in the November 8 election. The company's market cap is about $11.7 billion, according to data compiled by Bloomberg.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
That's the conclusion of Monness Crespi Hardt & Co. analyst James Cakmak, who said that the social media company would see as much as $2 billion in market value wiped out if @realDonaldTrump quit tweeting.
It's not that the president's defection would touch off a mass exodus, lowering the number of "monetizable" daily active users, Cakmak said in an interview. Instead, losing its most prominent user would hit Twitter's intangible value and lead to what's known as multiple compression.
While Twitter doesn't disclose the total number, Cakmak estimates daily users are around 125 million, about 30 percent fewer than Snap Inc. Twitter said in July that daily active users rose 12 percent in the second quarter, compared with the same period in 2016.
Advertisement
Twitter's business doesn't face much risk from "potential diminishing political relevancy," Cakmak said in a note published Thursday. "What's most important is the execution of the right strategy, since at the present state we find Twitter not capitalizing on the opportunity that's in front of them."
Advertisement
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
COMMENTS
Advertisement
Donald Trump Unblocks More Critics On Twitter As Ordered By Court Twitter Adopts 'Safeguards' After US President Trump's Account Shutdown Twitter Says President Trump's Account 'Inadvertently Deactivated' By Employee How Extreme Weather Is Leading To Rise In Child Marriages In Pakistan Who Is Jasveen Sangha, "Ketamine Queen" Charged With Matthew Perry's Death J&K To Vote In 3 Phases, First Assembly Polls Since Article 370 Was Scrapped Hyundai Venue S+ Variant Gets Cheaper, Features Electric Sunroof Uttarakhand Board Class 10, 12 Supplementary Exam Results Released "Probably First Time Since '87/88...": Omar Abdullah On J&K Poll Dates Track Latest News Live on NDTV.com and get news updates from India and around the world.