Twitter Slows Down Fleets Launch Amid ‘Performance’ Issues; Street Sticks To Hold

Twitter announced that it needs to slow down the rollout of its disappearing tweets tool ‘Fleets’ to fix performance issues, according to a tweet by the company’s support team on Wednesday. The debacle comes after the social media giant had launched the feature worldwide on Tuesday.

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Twitter’s (TWTR) support team said “We’re slowing down the rollout of Fleets to fix some performance and stability problems. If you don’t have the feature yet, you may not get it for a few more days.” The team added “We love that so many people are using Fleets and want to ensure we’re providing the best experience for everyone.”

In Tuesday’s blog post, Twitter’s design director Joshua Harris and product manager Sam Haveson said that “Fleets are for sharing momentary thoughts – they help start conversations and only stick around for 24 hours.” Further, “You can Fleet text, reactions to Tweets, photos or videos and customize your Fleets with various background and text options.”

On Nov. 2, Twitter posted stronger-than-expected 3Q results. Its 3Q sales of $936 million jumped 14% year-over-year on higher advertising sales and topped the Street estimates of $777 million. Its 3Q earnings of $0.19 per share beat analysts’ estimates of $0.06 and increased 11.8% from the year-ago quarter. (See TWTR stock analysis on TipRanks)

Rosenblatt Securities analyst Mark Zgutowicz this month maintained a Hold rating on the stock with a price target of $40 (7.7% downside potential). He remains cautious on Twitter stock as he sees “potential near-term US DAU [daily active users] disruptions as emerging competitor Parler sees user growth spikes and TWTR faces tough ’21 DAU comps.”

With shares up by about 35.2% year-to-date, the rest of the Street remains sidelined on the stock. The Hold analyst consensus is based on 22 Holds, 5 Buys and 1 Sell. The average price target stands at $46.63, implying upside potential of about 7.6% to current levels.