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Twitter Inc (TWTR) Stock Remains a Huge Disappointment

By U.S. News & World Report

When Snapchat parent Snap dominated headlines Feb. 3 after filing the S-1 for its eagerly awaited initial public offering, it was easy to get excited about the prospects for this hot, fast-growing social media program. But at least investors had to have been thinking, “Man … can’t Twitter Inc (ticker: TWTR) catch a break?

That’s because Snapchat’s IPO is a fresh reminder of all the potential that could be — and everything that wasn’t, in the case of TWTR stock — when it comes to social media offerings. Worse: Snap’s filing comes just days before Twitter’s fourth-quarter earnings report Feb. 9.

So, what could be awaiting Twitter this time around the earnings merry-go-round?

First, Twitter’s most basic problem is expected to persist: The company simply cannot make a profit in the business of tweets. Sure, Wall Street expects TWTR to make 12 cents per share, but that’s using estimates for non-GAAP earnings — and on that basis, Twitter has been operating at a profit for years. However, in the third quarter, Twitter’s non-GAAP earnings came to 13 cents per share … but the company posted a 15-cent GAAP loss. The second quarter was identical.

[See: 7 of the Best Stocks to Buy for 2017.]

Besides, if Twitter does hit its fourth-quarter expectations, that will represent a 25 percent decrease in adjusted earnings, from 16 cents in the year-ago period — and on just 4.2 percent revenue growth to $740.1 million, no less.

This kind of poor operational performance is, in a nutshell, exactly why shares are now down more than 30 percent from Twitter’s IPO price of $26, roughly 60 percent from TWTR’s first day of trading and more than 75 percent below shares’ all-time high near $75 — set in late 2013.

The broader problem, of course, is glacial user growth that’s showing no signs of a meaningful turnaround. For its third quarter, Twitter reported just a 3.3 percent increase in monthly active users — this, during a quarter in which the service was streaming NFL games and now-President Donald Trump’s tweetstorms were giving people a reason to check into Twitter on a daily basis.

That report, by the way, included an announcement that Twitter would be cutting 9 percent of its workforce.

Twitter has been dropping payroll in other ways, though — namely, the voluntary departures of most of its executive positions. Chief Technology Officer Adam Messinger, product VP Josh McFarland and China head Kathy Chen all have departed over the past couple of months. At least at last check, Jack Dorsey still is moonlighting as CEO, when he’s not at his day job as the chief of Square ( SQ), that is.

And while TWTR stock is enjoying a nice 8 percent lift so far in 2017, the stock still is worth about a quarter less than in early October, when Walt Disney Co. ( DIS), Salesforce.com ( CRM) and a host of other parties supposedly interested in buying up the social network apparently got cold feet.

So … does Twitter have anything going for it?

Yes, but even the company’s positives seem to smell a little spoiled. For instance, Twitter did sell its Fabric developer platform to Alphabet ( GOOG, GOOGL) earlier this year in an effort to focus “on our core products and businesses,” which the company certainly needed to do, and which falls in line with its other recent decision to shut down Vine, which Twitter a few days later upgraded to trying to sell Vine.

[See: 10 Long-Term Investing Strategies That Work.]

But the sale of Fabric, at an undisclosed price, would add the one thing Twitter doesn’t need — cash. TWTR boasts $3.6 billion in cash and short-term investments — more than double what it would need to cover its $1.7 billion in total debt. And Fabric itself will be a great fit with Alphabet’s Firebase team, which makes one wonder: Why didn’t Twitter keep Fabric and use it as an incentive to swallow the whole TWTR elephant?

The one potential bullish wild card is just how fruitful the 2016 election and aftermath have been for Twitter. It’s possible that Trump’s election boosted interaction on the site, especially among his supporters. But Twitter isn’t exactly considered to be a friend of the right, and actions such as banning Brietbart editor Milo Yiannopoulos may have acted as a counterweight to this potential tailwind.

Long story short: There’s a small chance Twitter might have an ace up its sleeve and pop on surprising fourth-quarter earnings. But even then, it’s doubtful we find out anything that shows Twitter is making a meaningful turnaround in its core business.

More earnings in focus

Disney. Disney doesn’t have much of a bar to clear when it reports earnings after Tuesday’s bell. Revenues are expected to tick just a tenth of a percent higher, while profits are projected to decline by about 8 percent to $1.50 per share. But those estimates are less a condemnation of Disney’s operations and more the result of trying to follow up last year’s first quarter, which included “Star Wars: The Force Awakens.” Investors also will be focused on ESPN — not just how much damage the subscriber numbers have taken, but also timing on the previously announced direct-to-consumer streaming service.

Nvidia (NVDA). Can NVDA keep up its ludicrous run? Nvidia stock has sprinted from the high $20s to its current perch around $115 in just a year. However, the graphics chipmaker faces its next obstacle this Thursday after the bell, when it reports fourth-quarter earnings. Analysts expect Nvidia to report top-line growth of 50 percent on a bottom-line explosion of 137 percent to 83 cents per share. At the least, RBC Capital Markets’ Mitch Steves still feels good about Nvidia ahead of the report, upping his price target from $115 to $124 on big hopes for Data Center revenue growth.

This week’s earnings calendar

Monday. 21st Century Fox ( FOXA)

Tuesday. BP ( BP), General Motors Co. ( GM), Michael Kors Holdings ( KORS), Gilead Sciences ( GILD), Mondelez International ( MDLZ), Panera Bread Co. ( PNRA), Twilio ( TWLO), Yum China Holdings ( YUMC), Disney

Wednesday. Allgeran ( AGN), GrubHub ( GRUB), Humana ( HUM), Time Warner ( TWX), Whole Foods Market ( WFM)

Thursday. Coca-Cola Co. ( KO), CVS Health Corp. ( CVS), Dunkin Brands Group ( DNKN), Kellogg Co. ( K), Viacom ( VIAB), World Wrestling Entertainment ( WWE) Yum Brands ( YUM), Activision Blizzard ( ATVI), Expedia ( EXPE), Pandora Media ( P), Yelp ( YELP), Zynga ( ZNGA), Nvidia

[See: 20 Awesome Dividend Stocks For Guaranteed Income.]

Friday, Feb. 10. ArcelorMittal ( MT)

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Twitter Inc (TWTR) Stock Remains a Huge Disappointment originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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