KEY POINTS OF DISCUSSION
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BACKGROUND (2014-2016): We estimate that the series of events that ultimately led TWTR to restructure was the result of self-inflicted wounds on the part of an unsustainable monetization strategy. We've broken down the history of its business model to provide context around why we're now getting constructive.
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WHAT'S CHANGED (2017): We originally viewed TWTR’s decision to restructure as a cop-out preempting an inevitable decline in ad revenue. Now we realize that mgmt has also been right-sizing its model and pivoting its monetization strategy in the process. We believe the model is now built for sustainable growth after bearing the brunt of its transition pains during 2017 (see second section of deck for supporting detail/analysis).
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LOOKING FORWARD (2018): We suspect TWTR could return to double-digit ad revenue growth by as early as 1H18. Further, after vetting what we had previously viewed as the two biggest risks to the story (users and advertiser demand), we now feel more comfortable heading into 2018 given the collective growth driver between the two.
Let us know if you have any questions or would like to discuss in more detail.
