Yet Another Positive For Twitter Inc (TWTR) Stock

Twitter Inc (NYSE:TWTR) just signed another live streaming deal. Should you buy the stock now?

According to a news piece published on the NFL website just after markets opened yesterday, Twitter Inc (NYSE:TWTR) and NFL have signed a multi-year live streaming deal "to deliver uniquely packaged official NFL video and other types of content to fans around the world daily, year-round." To be clear, San Francisco, California-based microblogging site, Twitter, lost rights to live stream games, which it did last season, to Amazon.com Inc (NASDAQ:AMZN) earlier this year, and that hasn't changed. NFL's deal with Twitter doesn't consist of live game streaming rights. Yet, the deal is a positive for the platform. For starters, the deal shows that Twitter's live streaming platform isn't a dud.

Twitter's Live Streaming Platform May Work After All.

When Amazon managed to grab rights to live stream NFL games, it came across as a big failure on Twitter's part, to prove its potential as a live streaming platform. However, the recent deal suggests that might not entirely be the case. For a start, the fact that the NFL still wants to enter a deal with Twitter for any kind of content streaming, suggests that they saw some potential there. More so because it is willing to produce content specifically for Twitter, and do it throughout the year. The deal, which consists of a wide variety of content, will "offer brands the opportunity to advertise on official NFL content created specifically for the Twitter platform", which can only be good for Twitter.

Nobody is aware of all the bids that were made for live games streaming this year by the various platforms, but if reports are to be believed, Amazon reportedly paid $50 million, way higher than the ~$10 million which Twitter paid last year for the rights. We don't want to read too much into this, but that might have been one of the reasons why Amazon won the rights this year.

Another encouraging sign is that, among the 16 deals that Twitter recently unveiled at NewFronts, where digital-media organizations present their video content plans to ad buyers, was a pre-market show by Cheddar. Cheddar, a millennial-focused financial news startup, has been running a post-market analysis show, Closing Bell, that has aired on Twitter everyday at 3 p.m. ET since last fall. The fact that they now want to add another segment suggests that the response on the post-hours show has been reasonable, at the very least. The idea here is not to list out in detail each of the 16 deals signed by Twitter. So, we'll quickly sum this up. In a nutshell, the content Twitter has lined up is quite promising, spanning across a wide variety of interests. And the stickiness shown by some of its partners is indeed encouraging.

That said, not everybody thinks this is the right direction for the platform to take. Brian Thomas writes in his post on The New Yorker:

"Twitter is short-form, real-time, and text-based. It’s built for instant alerts and rapid consumption. It is an ideal system for delivering sips of information from an abundant stream. But the live-video effort forces you not only to leave the stream but to set aside time to watch. This is an idea that must have come from a financial guy’s head: We need to boost engagement and make money, so let’s live-stream and keep people longer and sell advertisements. The question is, does any Twitter user want this?"

While Thomas isn't entirely wrong, one could argue that Twitter's live streaming efforts are aimed at those who aren't on the platform yet, which of course, is a big majority of the global online fraternity. Besides, the micro-blogging site isn't replacing its current product with this one. Live streaming is meant to be an addition to what the platform already offers. So, the way we see it, Twitter is progressing in the direction it should, and that's a good thing.

Should You Buy Twitter Stock Now?

Twitter stock is up by well over 25% in just over a fortnight. Around a year ago, Twitter's live streaming efforts generated a lot of interest, with the platform signing multiple deals and attracting more live streaming viewership for the same events than Facebook and YouTube. However, not much came out of it in terms of revenue or user growth. This time around, things look a little more exciting, with the platform lining up round the clock live streaming content. However, investors would do well not to get ahead of themselves. It might be a good idea to wait a bit and see how things unfurl, in financial terms, before jumping in. But if you must invest, you might be better off placing your bets on fundamentally strong companies, some of which have also returned over 600% since 2011. Interested? Check out our top stock picks from the tech sector.


Vikram Nagarkar Vikram Nagarkar   on Amigobulls :

Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice.

Buying and selling of securities carries the risk of monetary losses.Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.

Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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