The tweetstorms of the United States President Donald Trump are the source of revenue for the micro-blogging giant, according to recent leaks of new site The Bloomberg. The micro-blogging site has the chance of losing almost a fifth of its value, according to the report of Bloomberg.
Donald Trump’s departure from Twitter would do this to Twitter
On Friday, the news outlet said that the micro-blogging site would see as much as $2 billion disappear in market value from its platform if the account – @realDonaldTrump – stopped tweeting about whatever was on his mind several times a day. It is not that the defection of the US President would persuade more people to join the micro-blogging giant but it will definitely reduce the number of monetizable daily active users, according to James Cakmak, an analyst at Monness Crespi Hardt & Co.
Losing one of its most prominent user would hit the intangible value of the tech giant and lead to what is called “multiple compression.” Cakmak, who has a neutral rating on Twitter shares, said that there is no better “free advertising in the world than the President of the United States.”
According to the estimations of the analyst, the micro-blogging site has over 125 million daily users, which is around 30% fewer than photo-sharing app Snap Inc. Twitter, however, has not disclosed any number so we do not know if Cakmak is accurate in his estimates.
In July, the micro-blogging site said that daily active users increased to 12% in the second quarter, in comparison to the same period in 2016. The social media platform has over 36 million followers and has tweeted more than 35,000 times since he signed up in 2009.
Execution of right strategy is important: Cakmak
On Thursday, in a note, Cakmak said that the business of the micro-blogging site does not face much risk from potential diminishing political relevancy. He said, “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.”
The share of the micro-blogging site have dropped over 14% since Mr. Donald Trump became the President of the United States of America. In addition to this, according to data compiled by news outlet, the market cap of the news site is over $11.7 billion.