How Much Is Twitter Worth?
Social media messaging platform Twitter (NYSE: TWTR) sees roughly 500 million tweets from hundreds of millions of users — and bots — per day, but the company also sees billions of dollars go toward operating expenses, only becoming profitable for the first time in 2018 and experiencing a net loss in 2020 and 2021. The company has taken some hits over the years; most recently for declining ad revenue and smaller-than-expected user growth. But it also has undergone significant changes in the last several months that could turn things around.
Overview of Twitter
Read on to learn about Twitter’s finances and other facts investors should know.
|CEO Parag Agrawal’s Base Salary||$1 million|
|What Twitter Is Worth||Financials|
|Share Price, 52-Week Range||$32.05-$80.75|
|2021 Revenue||$5.077 billion|
|2021 Profit||-$221.410 million|
|GOBankingRates’ Evaluation of Twitter’s Net Worth||$13.316 billion|
Twitter’s Market Cap: $29.05 Billion
Investors use market capitalization, or market cap for short, to gauge a company’s worth, and the market cap is just all the company’s stock combined. Twitter’s market cap as of Feb. 17 is $29.05 billion.
Twitter’s Net Worth: $13.316 Billion
Market cap gives investors and prospectors an idea of a company’s worth, but with a caveat: Market prices change day to day, which means a bad trading day could throw off the company’s valuation. The GOBankingRates Evaluation of a company’s net worth, however, considers factors like profit and revenue. The resulting value is more conservative but based on concrete figures.
Based on Twitter’s revenue and profits from the last three years, Twitter is worth $13.316 billion.
Twitter’s Trouble Turning a Profit Might Be Turning a Corner
Twitter went public in November 2013 and enjoyed a strong share price of $45 due to investor interest. The platform is a favorite medium for celebrities and politicians. Reporters and journalists frequently use screenshots of tweets in their stories. Users can even use their accounts to boost “hashtag” movements.
Despite Twitter’s apparent ubiquity — and, some would say, influence — the company lost money until 2018 and again was operating in the red by 2020. Notably, shares dipped sharply in January 2020, after Twitter banned former President Donald Trump from the platform. Trump’s account had been Twitter’s most popular. However, shares recovered quickly. Following a year-long rally, the stock has been in a freefall since January 2021. As of closing on Feb. 16, shares were down about 50% compared to a year ago.
Overall, 2021 was a difficult year that saw, among other, pandemic-related challenges, an $809.5 million class-action settlement. But the company is now under the leadership of a full-time CEO. Leading the charge into 2022 is Parag Agrawal, who in November 2021 replaced Jack Dorsey as CEO.
Good To Know
In its fourth-quarter 2021 earnings release, Twitter reported earnings, revenue and user growth that missed analysts’ expectations, according to CNBC. While revenue and earnings were near misses, the number of monetizable daily active users fell 1.6 million short of projections from StreetAccount.
Twitter has ongoing challenges, not the least of which is growing the mADU metric fast enough to meet a goal of 315 million by the end of next year and getting ad revenue back on track. According to the earnings release, ad engagement decreased 12% for the year while the cost of engagement grew 39%, partly due to the impact of COVID and a shift toward ad formats that typically have lower engagement despite higher costs.
Average mDAUs increased 13% in the fourth quarter of 2021, primarily outside of the U.S. In an earnings call reported by CNBC, Agrawal said he believes the company can meet the 315-million mADU goal in the timeframe established by Dorsey.
On a positive note, Twitter will implement a stock buyback program that will return $4 billion to shareholders. The program was effective as of the Feb. 10 earnings announcement. Of that $4 billion, $2 billion will go toward an accelerated buyback and the other $2 billion will repurchase shares over time.
In its guidance for 2022, Twitter predicts revenue of between $1.17 billion and $1.27 billion and an operating loss of between $225 billion and $175 billion.
Twitter CEO Jack Dorsey co-founded Twitter in 2006 with Noah Glass, Biz Stone and Evan Williams. He sent out the world’s first tweet in March 2006, which read: “just setting up my twttr.” In 2008, he was fired for subpar leadership, but he returned as Twitter’s chief executive officer in 2015.
Twitter has been the target of criticism from investors over the company’s lack of profitability, leading some to suggest that his role as CEO of Square — whose flagship product is Cash App — made it difficult for Dorsey to give Twitter the focus it needs to make it profitable. Dorsey stepped down on Nov. 29, 2021. His replacement, Parag Agrawal, first joined the company in 2011 and most recently served as chief technology officer.
Sean Dennison contributed to the reporting for this article.
Data was compiled on Feb. 17, 2022, and is subject to change.
Methodology: The GOBankingRates Evaluation assesses a company’s net worth based on the company’s total assets, total liabilities, and revenue and net income from the last three years. Base value is established by subtracting total liabilities from total assets from the company’s last full fiscal year. Income value is established by taking the average of the revenue from the last three full fiscal years, plus 10 times the average of the net profits from the last three full fiscal years, and then calculating the average of those two figures. The final GOBankingRates Evaluation number is the sum of the base value and the income value.
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