Through the course of this article, we will understand all about Twitter stock and the top shareholders of this corporation.
Twitter (TWTR), a social media startup launched in 2006, is now prominent on the Internet and in all forms of media thanks to its posts, known as tweets.
It’s most known for politicians and celebrities sending out breaking news tweets. Still, it also serves as a forum for millions of users to share their ideas, interact, share information, and read breaking news. Individuals and corporations alike can utilize the site for free.
After creating an account, users can send up to 280-character messages (“tweets”) up to 2,400 times per day that are instantly disseminated to followers in a continually refreshed feed.
Twitter’s revenue is split into two categories: advertising services, which account for the great majority of the total profits, and data licensing and other services, which account for the remainder.
Other social media companies such as Facebook parent Meta Platforms Inc. (FB), Google and YouTube parent Alphabet Inc. (GOOG), Snap Inc. (SNAP), and others are among Twitter’s main competitors.
Until April 2022, when Tesla (TSLA) Chief Executive Elon Musk revealed his new 9% ownership in the social media firm, institutional investors topped the list of Twitter’s top shareholders. Musk’s purchase pushed mutual fund powerhouse The Vanguard Group to second position on the list, with its funds owning 8.8% of Twitter’s common shares as of year-end 2021.
Twitter Stock Major ShareHolders
Twitter was and continues to be distinguished from its competitors by its communication brevity. Tweets, or platform posts, are typically restricted to 280 characters.
As of December 31, 2021, Twitter’s messaging platform has around 217 million daily active users, up 13% from the previous year. In Q4 2021, the corporation brought in $1.57 billion in profits, up 22% over the same quarter in 2020.
Here is a list of the top five Twitter stockholders based on the number of shares they possess. Notably, Dorsey is absent from this list, despite owning a 9.4 percent ownership in Block Inc. (SQ), the mobile payments firm he established as Square and now leads as CEO.
- Musk, a regular Twitter user, revealed on April 4, 2022, that he owned 73.5 million Twitter shares or 9.2% of the corporation. According to the disclosure form, it was triggered by an occurrence on March 14, 2022.
- Within ten days after acquiring a holding of 5% or more in a publicly-traded firm, investors must file an ownership disclosure.
- Musk submitted Schedule 13G as a passive investor, which is described as a shareholder who does not plan to exercise control over the company. Still, on April 5, Twitter appointed Musk to its board of directors, and Musk filed Schedule 13D to designate himself as an active investor.
- According to the filing, Musk’s ownership has been reduced to 73.1 million shares or 9.1% of the company. On April 11, just less than a week later, Twitter CEO Parul Agrawal revealed Musk’s decision not to join the board of directors
Vanguard Group, Inc.
- Vanguard Group is Twitter’s second-largest shareholder and one of the world’s largest investment managers, providing lots of mutual funds, exchange-traded funds, and retirement programs. As of January 31, 2022, the corporation is managing over $8.1 trillion in assets.
- As of December 31, 2021, Vanguard funds owned around 70.4 million Twitter shares, accounting for 8.8% of all outstanding shares.
- Among the group funds owning Twitter shares are the Vanguard Communications Services ETF (VOX) and the Vanguard Growth ETF (VUG).
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- Morgan Stanley (MS), an investment group and asset manager, owns the third-largest holding in Twitter, with around 67 million shares, or 8.4% of the overall outstanding as of year-end 2021. Following the acquisitions of online brokerage E*TRADE in 2020 and mutual fund manager Eaton Vance in 2021, Morgan Stanley had $6.5 trillion in customer assets as of the same dat. The company also offers trading services and investment research in conjunction with investment banking and asset management.
- As of year-end 2021, global fund manager BlackRock Inc. (BLK) had 52.1 million shares of Twitter in its various ETFs and other investment vehicles, representing a 6.5% ownership.
- By the end of 2021, BlackRock had $10 trillion in assets under management.
- The prominent iShares ETF line is produced by the company. One of the BlackRock funds holding Twitter is the iShares Evolved US Media and Entertainment ETF (IEME).
State Street Corp.
- As of year-end 2021, State Street Corp. (STT), which runs the SPDR exchange-traded funds as State Street Global Advisors, had 36.4 million Twitter shares in its funds, representing a 4.5 percent position in the firm.
- State Street provides a wide range of investment management services to institutional clients, including securities custody. As of Q4 2021, the firm had $4.1 trillion in investment assets under control.
Is Twitter Stock A Good Buy Now?
On Monday, shares of social networking platform Twitter (TWTR 1.82 percent) soared by more than 30%. Elon Musk, the founder of Tesla (TSLA -3.78%) and SpaceX, announced that he had acquired a 9.2% share in the firm.
Some investors clearly believe Elon Musk’s interest in the tech stock is positive news for the stock’s long-term prospects. But, rather than speculating on the stock solely because Elon Musk is purchasing shares, let’s examine the company’s fundamentals in relation to its stock price to see if shares are truly attractive.
Twitter’s revenue increased by 22% year over year in the fourth quarter. This growth was aided by “ongoing revenue product improvements, outstanding sales execution, and a wide, sustained increase in advertiser demand,” according to the company’s Q4 letter to shareholders.
The company’s growth in salable daily active users is, of course, critical to this expansion. Advertisers would be less attracted to the platform if it didn’t have a large and healthy user base. In order to do this, Twitter’s potentially profitable daily active users climbed by 13% year over year in Q4, reaching 217 million.
According to management, this user increase was supported by a combination of product upgrades and platform debates about current and global issues.
Importantly, management anticipates that the company’s strong top-line growth will continue in 2022. When revenue from the MoPub properties it divested and wound down from 2021 financials is excluded, management expects profit to grow at a rate of low to mid-20% this year.
Wall Street has flocked to the stock due to Elon Musk’s interest, and the corporation currently has a market valuation of $41 billion. While the stock’s rerated valuation following Elon Musk’s involvement doesn’t appear outrageous, it is still too expensive to recommend as a buy.
To be fair, this strategy for evaluating Twitter stock on the surface may be too conservative. And besides, Meta Platforms has just achieved a net profit margin of more than 30%.
Even a $41 billion market value may provide a fair entry point into Twitter if the company’s net profit margins climb to similar levels over time and revenue keeps growing at a quick pace.
However, for the time being, investors may wish to sit on the sidelines and hope that the Elon Musk premium on shares fades on Twitter stock.
What are your thoughts and opinion on the Twitter Stock and Elon Musk becoming the highest shareholder of Twitter? Share your ideas and views in the comment section.