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Twitter Inc on Thursday reported its highest-ever yearly growth of daily users who can view ads, beating analysts’ estimates on usage and sending its shares up 6% in pre-market trading.
Twitter’s average monetizable daily active users (mDAU) increased 34% year over year to 186 million, above analysts’ estimate of 176 million, in a rise it said was primarily driven by external factors such as shelter-in-place requirements and increased conversation around the COVID-19 pandemic.
But the company missed Wall Street’s lowered expectations for quarterly revenue, as the coronavirus-spurred economic slowdown battered the company’s largely events-oriented digital ads business.
Ad sales, which make up 82% of Twitter’s revenue, sank 23% to $562 million, a drop the company attributed to brand spending pauses tied to the pandemic and U.S. civil unrest. Analysts had expected $585 million.
Total revenue came in at $683 million, down 19% year-over-year, helped by steadier sales growth from the licensing of users’ posts to researchers and marketers.
The company said it finished rebuilding its ad management technology in the second quarter, which would support faster development of new formats going forward and was rolling out measurement tools for “direct response” ads used by app developers.
Twitter reported a second-quarter loss of $1.2 billion, largely driven by the reversal of a tax benefit established last year, when the company transferred intellectual property to Ireland. Because of the second quarter’s steep coronavirus-related losses, Twitter did not make enough money to take advantage of the tax benefit.
Adjusted to exclude the tax considerations, the company incurred a loss of $127 million, or 16 cents per share, roughly in line with analyst expectations of a $125 million loss. It had an adjusted profit last year of $37 million.
Costs and expenses grew 5% to $807 million, below the increase in the low teens that Twitter had forecast. The company said it anticipated expense growth of 10% or more in the third quarter.
On the technical front, the RSI is at 64.08% and suggests that the market can move in an upward direction. The current price is trading above all the moving averages. The stochastic is forming a downside crossover.
Overall Bias is Positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion—TWITTER—BUY at $36.92 Take Profit at $42.50 Stop Loss at $34.00