Can Jack Dorsey Lead Both Twitter and Square to Success? - Zacks Market Edge PodCast 23

Published: March 15, 2016, 6:38 p.m.

Welcome to Episode #23 of the Zacks Market Edge Podcast. Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. In this episode, Tracey is joined by Brian Bolan, Zacks Equity Strategist and Editor of the Game Changer and Stocks Under $10 services, to discuss how Jack Dorsey is doing so far at the helm of not just one, but two public companies: Twitter (TWTR) and Square (SQ). Can Twitter Be Saved? A co-founder of Twitter, he was appointed CEO in October 2015 while, at the same time, he took his other business, financial software and lending provider Square Inc, public. Just going IPO is enough to send even seasoned CEOs ducking for cover, let alone trying to run another business, one of which is struggling. Do you use Twitter? If you answered “no”, you’re not alone. Twitter’s core monthly users fell to 305 million in the fourth quarter from 307 million in the prior quarter as the platform struggles to obtain new users. Yet it’s still expected to grow revenue at a double digit rate in 2016. Shares fell to new post-IPO lows in 2016. What will Dorsey have to do to turn it around? Or is Twitter a lost cause? Square Reports For the First Time Square recently reported its first earnings report as a public company. It was better than expected, even though the company isn’t profitable and it took a wider loss in the quarter than a year ago. But revenue rose 49% in the quarter. One big area of possible growth is in Square Capital, its lending arm. It extended $400 million in loans in 2015 through 70,000 advances to 50,000 of its 2 million customers. But there’s a lot of competition in this space. On Deck Capital (ONDK) and LendingClub Corporation (LC) have been in the small business loan market for a while. Last quarter, On Deck saw loan origination rise 51% year over year. LendingClub’s jumped 91%. None of these players has significant market share, yet, which means there are opportunities there.