Twitter has fallen on some rough times recently. Unfortunately, the company hasn't been able to get new users to sign up and stick around to become regular active users. As a result, the CEO of the company, Dick Costolo was forced into a resignation by investors. While Twitter looks to find a new CEO, co-founder Jack Dorsey has take the position as interim CEO. However, news came out yesterday that the CEO shakeup was likely over and that Twitter was making a big change, leading to a better user experience. However, while Twitter is likely still working on the user experience change, yesterday's news yielded no actual results with regard to the CEO shakeup today. So today, we'll talk about what yesterday's news was, the reaction we saw in the market, what we're seeing today and why as well as what we can expect to see from the stock moving forward.
The News Around Twitter Yesterday
As mentioned above, there was quite a bit in the major media about Twitter yesterday. Every story surrounded two major announcements…
Twitter CEO Search – Re/Code announced that Twitter has come to the end of its CEO search, stating that Jack Dorsey would be taking on the permanent role as CEO of Twitter. The rumor said that there would likely be an announcement made today that Dorsey has taken on the permanent role.
Twitter Removes Character Limits – Another big piece of news yesterday surrounded user experience. In an attempt to create a better experience for users, Twitter is working to take the 140 character limit out of private messages. The social network will also be allowing comments on retweets.
How The Market Reacted To The News
Yesterday's news addressed both major issues that investors had with Twitter. Naturally, when good news comes out about a publicly traded company, we see improvements in the value of the stock. That's exactly what we saw from Twitter yesterday as the stock climbed from $25.58 per share at the open to $26.98 per share by the end of the day.
What We're Seeing From Twitter Today & Why
Unfortunately, today hasn't been such a positive day for Twitter. The stock closed at $24.67 after falling 8.43%. For Twitter and its investors, the market couldn't close soon enough. However, the declines came for good reason. Investors were expecting big CEO news today. That's one of the major reasons we saw gains yesterday. Ultimately, Twitter investors want Dorsey to take the position as permanent CEO and rumors said that they were getting what they wanted. However, that didn't happen today, which led to a major investor sell off.
What We Can Expect To See Moving Forward & How To Take Advantage Of The Trends
If Dorsey does come out and say that he is taking the position as the permanent CEO of Twitter, it's likely that investors will push the stock up dramatically. There's still a chance for this to happen tomorrow. So, keep a close eye on the news. If this does happen, get ready to start purchasing call options to take advantage of the upward trends. Adversely, if we don't see news that Dorsey is indeed taking on the permanent CEO role, we can expect to see more declines. In which case, it will be time to look for put option opportunities.
What Do You Think?
Where do you think Twitter is headed and why? Let us know in the comments below and find more financial news by TheBinaryAdvisor.
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