4. Twitter, Inc. (NYSE:TWTR)
Price as of March 11, 2022: $33.00 per share
RiverPark Funds published its “RiverPark Large Growth Fund” third quarter 2021 investor letter last year – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) lost 3.23% during the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced by 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, and the Morningstar Large Growth Category lost 0.07%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
RiverPark Large Growth Fund, in its Q4 2021 investor letter, mentioned Twitter, Inc. (NYSE:TWTR) and discussed its stance on the firm. Twitter, Inc. (NYSE:TWTR) is a San Francisco, California-based social network company with a $26.4 billion market capitalization. Twitter, Inc. (NYSE:TWTR) has lost 23.65% since the beginning of the year, while its 12-month losses stand at 51.54%. The stock closed at $33.00 per share on March 11, 2022.
Here is what RiverPark Large Growth Fund had to say about Twitter, Inc. (NYSE:TWTR) in its Q4 2021 investor letter:
“Twitter, Inc. (NYSE:TWTR): Despite reporting in-line third quarter results, Twitter, Inc. (NYSE:TWTR) shares struggled at the end of 2021. For Twitter, Inc. (NYSE:TWTR), the declines could be attributed to a fear of continued headwinds from Apple’s iOS tracking changes, as well as the stock continuing to be a show-me story after posting two disappointing quarters since its investor day in February (prior to this in-line quarter), as well as its recent CEO change (founder Jack Dorsey stepped down and is being succeeded by long-time CTO Parag Agrawal). Investors continue to be concerned with the platform’s user engagement, as total monetizable daily active users (mDAU) grew 13% year over year to 211 million, in-line with expectations, but still below management’s long-term target of 20% growth. Management expects mDAU growth to accelerate, driven by continued economic reopening and new features such as Spaces and Communities and an increase in the number and penetration of Twitter Topics. For the quarter, revenue increased 37% year over year to $1.3 billion and 4Q guidance was strong at about 20% growth, as Twitter has less exposure to Apple’s ATT headwinds.
With $4.8 billion of TTM revenue (only 4% of Facebook’s revenue), the company has a large opportunity to take share in the $200 billion global digital advertising market that continues to flow to mobile, Twitter’s focus. As the company continues to launch and improve its products (including stories, audio chat, podcasting, video and subscriptions), its platform should become more compelling to both users and advertisers, allowing it to take advertising dollar share through increased user engagement and ad pricing. As Twitter showed this year, we believe that the company can generate 20%+ revenue growth while also driving operating leverage in its already highly profitable business model, generating expanding excess free cash flow growth over time (3Q OCF grew 81% year over year).”
