July 12, 2016

Twitter to stream US sports content | stock could go higher

Re/Code is reporting an aggressive move by Twitter into sports-content streaming, which might be just what the stock needs.

While it's unclear how much Twitter can pay for the rights to stream NBA games and other sports broadcasts, this move represents the first important, needle-moving action by the company's new management team.

If this effort yields just a modicum of success, it could be a precursor to the company's sale. And a buyer with substantially more money than Twitter could accelerate Twitter's acquisition of streaming content, reversing a recent slump in the service's average monthly users.

Twitter has always offered a unique, difficult-to-duplicate social-media platform. But now, the company finally appears to be providing more exciting niche and value-added product applications.

My guess is that there'll be even more new-product announcements in the months ahead that could "turn on" investors and improve Twitter's takeover appeal.

Personally, I placed Twitter on my "Best Long Ideas" list on June 13 at $14.60 a share, and I've been adding to my stake recently even though the stock has been trading higher.

Position: Long TWTR.