The IPO of Twitter has received a lot of attention in the media. This is not so strange when you consider that it is the second largest IPO of a technology-oriented company after Facebook. Even more interesting is the fact that the company was loss-making during the IPO and still managed to raise almost two billion dollars. But how can you actually make a profit trading the Twitter share?
How can you actively invest in Twitter?
One of the best ways to trade Twitter as a CFD is via Plus500. Plus500 allows you to leverage Twitter so that you can take a large position with a small amount of money. In addition, you can take advantage of both ups and downs in the short term, allowing you to respond to all market conditions.
Would you like to try active Twitter CFD trading for free at Plus500? Then use the button below to instantly open a free demo at this broker:
Where can you buy Twitter stocks?
Do you have confidence in the future of the company Twitter? In that case, it may be smart to invest in Twitter by buying the shares. I myself trade in Twitter shares at eToro: you don't pay commissions on your investments at this broker. Use the button below to directly open an account with eToro:
What is the stock price of Twitter?
Are you curious how the CFD share of Twitter is doing? The chart below shows the price at which you can buy and sell CFD shares on Twitter:
How does Twitter earn money?
Twitter earns money with advertising revenue. Facebook has already proven that this can be very profitable. To remain profitable, however, Twitter will have to retain its users. When users switch to another platform, it can significantly reduce the profitability of Twitter.
Is it wise to invest in Twitter?
Internet companies such as Facebook and Google have been doing well for years and with an investment in a similar company you can achieve a high return. Is it also wise to invest money in Twitter shares? In 2019, Twitter managed to make a profit for the first time, which is of course a positive signal. At the same time, the company did report a decline in the number of users. This is a negative trend: without users the company cannot make a profit.
Threats to Twitter
The privacy laws that are becoming increasingly stringent within Europe are also a risk. Social media are increasingly in the spotlight, also when it comes to spreading fake news. Twitter tries to respond to this by blocking Tweets that contain false statement: Trump will certainly not be a fan of this new feature.
Although the number of users is decreasing, Twitter is succeeding in earning more and more from the users who do use the platform. The company has also shut down projects such as Vine and made people redundant, which could help reduce costs within Twitter. All of this can make a positive contribution to Twitter's results and thus to the company's share price.
However, it is important to keep a close eye on the competition: in the past, you often saw a new party devouring an old one. Today's youth no longer have any idea what Myspace is, and Twitter can easily have a similar end destination. It is therefore important to keep a close eye on the popularity of the network: in this way, you can determine whether an investment in Twitter is still interesting.
At the moment, Twitter manages to compete against the other giants. The microblogging network is especially popular for sharing news. Around major events such as the American elections, you can see that the network is used a lot.
Step-by-step manual for buying Twitter shares
When you go through the steps in this short guide, you can immediately buy your first Twitter shares.
Step 1: first open an account with a reliable broker where you can invest in American shares at low fees. In this way you increase the chance of achieving a positive return.
Step 2: do sufficient research and determine whether it is interesting to buy Twitter shares NOW. Sometimes it may be wise to wait until the price drops a little. The price of a share rarely moves in a straight line and by actively stepping in you can achieve an optimal result.
Step 3: determine with what amount you want to invest in Twitter. If you are prepared to take greater risks, you can trade with a larger amount of money. Are you afraid of losing money with your investment in Twitter? Then it may be wise to bet only a small amount. In any case, it is always advisable to spread your money over different stocks.
Step 4: choose whether you want to use a market order or a limit order. With a market order, you buy the Twitter shares at the current price. With a limit order, you can set a price at which you buy the stock. If you use a limit order, you may not buy any Twitter shares at all.
Step 5: once the investment has been opened, it is important to properly evaluate your investments. Investigate whether the social medium is still popular. Does Twitter seem to be going downhill? In that case it perhaps would be better to sell your Twitter shares again.
What is Twitter?
Twitter has become a worldwide phenomenon; even before stock were issued, everyone knew what this site stood for. With over 500 million users, Twitter is hugely popular: on the service, ordinary people and companies share short messages that may not contain more than 140 characters.
Despite the fact that the social network Twitter has existed for a long time, no profit has yet been made. When we remember this, it is really bizarre that the introduction price of the share was set at $ 26. After the introduction, the stock price rose even further to over 40 dollars!
Example: investment in Twitter
If you buy the Twitter share at a price of 40 dollars and the price rises to 42 dollars on the same day, you earn $2 per share purchased through a broker like eToro. If you use leverage, this amount can even increase further!
Suppose you use your first deposit to open a short position on Twitter on 14 November, which is then worth 45 dollars, when you go short you earn money when the price goes down. A few days later, already on 18 November, the price has dropped to 41 dollars and you immediately take your profit.
For this, you only use the deposit of $100 with the leverage of 1:20, you can then buy up to $2000 worth of shares, which is approximately 2640 dollars / 40 = 64 Twitter shares. With the deposit of $100 you would have made a profit of 184 euro which is a return of more than 180% on your initial deposit.
Please note that the leverage can work in two directions: if things go wrong, you can immediately lose your entire investment.
What is the future perspective for Twitter?
What do you think Twitter will do in the long term? The fact is that ultimately only profitable companies will remain; the company will therefore certainly have to make a profit if it is to remain successful. The comparable companies LinkedIn and Facebook are doing well on the stock exchange at the moment, so Twitter certainly has potential.
However, the investor pays 50 to 60 dollars per user; that is a lot! The money from the IPO will be used to finance more data centres and developers. Will Twitter be the future MySpace of the world, or does Twitter really have so much potential? What do you think?