Investors who have owned stocks in the last year have generally experienced some decent gains. In fact, the SPDR S&P 500 (NYSE:SPY) total return over the last 12 months is 17.2%. But there is no question some big-name stocks performed better than others along the way.
Twitter’s Bumpy Road: One company that has been a disappointing investment in the last year has been social media giant Twitter Inc (NYSE:TWTR).
The COVID-19 pandemic in 2020 was actually very good for Twitter’s business. While other companies were dealing with economic shutdowns, people around the world who were sheltering in place had little to do for entertainment and social interactions other than social media.
The 2020 U.S. presidential campaign and election also helped improve Twitter’s engagement, but Twitter made the controversial decision to ban former President Donald Trump from its platform in January 2021.
At the beginning of 2020, Twitter shares were trading at $32.31. By the beginning of March, the stock was up to $36 despite news of the coronavirus spreading in China prompting concerns about a U.S. pandemic.
Twitter bottomed at $20 during the pandemic-driven March sell-off. Fortunately for Twitter investors, the dip did not last long.
By the end of July, Twitter shares were back at new 52-week highs above $40, and the stock got as high as $52.93 in October prior to the U.S. elections.
Related Link: If You Invested $1,000 In Airline Stocks When Buffett Sold, Here's How Much You'd Have Now
Twitter In 2022, Beyond: Twitter ultimately made it to a new all-time high of $80.75 in February 2021. Twitter set ambitious long-term financial goals in March 2021, including growing its monetizable daily active users (mDAU) to at least 315 million by the end of 2023. In addition, Twitter said it will double its annual revenue from $3.7 billion in 202 to more than $7.5 billion in 2023.
Unfortunately, the stock took a big hit following its third-quarter earnings report in October 2021. The stock tanked after Twitter flipped from a net profit of $151 million in the third quarter of 2020 to a net loss of $434 in the third quarter of 2021.
Things went from bad to worse for Twitter investors in December 2021 when CEO Jack Dorsey announced his resignation. Dorsey co-founded Twitter in 2006, was ousted from the company in 2008 and returned to the company as CEO in 2015 to get its user and revenue growth back on track. Dorsey's departure has many investors skeptical that Twitter can hit its aggressive financial targets for 2023.
In addition, some investors may be growing increasingly concerned about regulatory crackdowns on Twitter and its data usage, content policing and advertising algorithms. Dorsey has long been a proponent of free speech, but new CEO Parag Agrawal has suggested Twitter should not be bound by the constraints of the First Amendment. If Twitter increases its content censorship in coming quarters, it could potentially create uncertainty for its user growth and engagement numbers.
At this point, Twitter investors who bought one year ago and held on have generated a disappointing return on their investment. In fact, $1,000 in Twitter stock bought on Feb. 7, 2021, would be worth about $651 today.
Looking ahead, analysts are expecting a rebound for Twitter in the next 12 months. The average price target among the 34 analysts covering the stock is $51.50, suggesting 41% upside from current levels.
