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Market Insights

Twitter & Walmart team up for livestream shopping

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Twitter is an exceptionally unusual business.

Where else could you peer directly into the mind of the world’s richest man…?

twitter & walmart image 1

OK, not the best example.

In many ways though, Twitter is unique.

A global hivemind, where interaction is governed more by common interests than friendship groups.

Barriers to industry leaders are lowered or removed. Information is freely shared, and by the time it’s ‘breaking news’ on TV, it’s usually old news on Twitter.

Despite these distinctive qualities, the stock just doesn’t match up on the social media measuring stick.

By Market Capitalization

  • Facebook/Meta ~$938bn
  • Snapchat ~$81bn
  • Twitter ~$37bn

TikTok has exploded in recent years too.

It’s easily forgotten, but Twitter bought Vine back in 2012, seeing short form videos as the perfect dovetail with short messages. Unfortunately they couldn’t make it work and ended up shelving the platform in 2016…

There have been other mis-steps along the way that have contributed to investor apprehension.

Recently however, Twitter has undergone something of an overhaul, launching

  1. Twitter Spaces (live audio conversations)
  2. Super Follows (subscriber-only content)
  3. Tips (reward creators directly)
  4. Twitter Blue (premium Twitter features for a small monthly fee)
  5. Live Shopping on Twitter

Many of these innovations have received positive comments and ratings from stock analysts.

The average analyst (12 month) price target via Nasdaq is $70.83

Via the WSJ it’s slightly lower at $68.23

Yet the price has collapsed below $50 over the past few weeks…

twitter & walmart chart

Down 32.8% since the 20th October high. What’s going on?!

Monetary policy is playing a part.

Mr Market suddenly cares about rate hikes, and the equity risk premium.

TL;DR Higher interest rates can make it harder for growth companies to attract capital & prosper.

The concerns around inflation and a rapid monetary response have led to some fairly indiscriminate selling of tech/growth stocks.

Digging into the members of the Nasdaq 100 index (19/11/2021)

  • 63% have a positive YTD return
  • 89% are at least 10% down from the YTD high
  • Average drawdown from the YTD high… 40%!

Twitter is down almost 43% since the February high of $80.45

What could turn their fortunes around?

Perhaps the addition of livestream shopping… This Sunday (November 28th) will see the first test!

A joint livestream shopping event between Twitter & Walmart: a 30-minute variety show highlighting electronics, home goods, apparel, seasonal décor, surprise special guests hosted by Jason Derulo

twitter & walmart card

William White, Chief Marketing Officer at Walmart said

  • “Twitter continues to be an important platform for Walmart’s business and our customers. We’ve been focused on charting new territory in shoppable livestreams and are excited to celebrate an important milestone together with the first Livestream Shopping event on Twitter.”
  • “We’re meeting customers where they are and making it easier to shop incredible deals and find inspiration through dynamic, interactive experiences. We look forward to continuing to bring engaging experiences to our customers that allow them to shop seamlessly while also being entertained.”

Keep an eye out for the reaction the following day when markets open!

Twitter will also continue rolling out shopping features across the platform, including the shop module

The success or failure of Twitter Shopping should be a big part of the Twitter story in coming months.

Not investment advice. Past performance does not guarantee or predict future performance.

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