Much maligned as a niche product that's not particularly easy to use, Twitter (TWTR) may be finding its footing.
Shares of the San Francisco-based micro-blogging platform have rebounded more than 25% since falling to an all-time low of $13.90 in May. The jump has been fueled by a string of new streaming deals designed to expand its user base, and by extension, advertising revenue.
On Tuesday, Twitter announced it will stream three of Bloomberg Media's daily news shows: "Bloomberg West," "What'd You Miss?" and "With All Due Respect." A day earlier, Twitter said it will air CBS's (CBS) coverage of both the Democratic and Republican National Conventions.
Twitter gained about 2% to $18.08 just before markets closed on Tuesday.
Twitter already live streams coverage of the Wimbledon tennis matches as well as the NFL's Thursday Night Football. Twitter is in the process of communicating with the NBA and Major League Soccer, according to Recode.
But are these deals enough to generate the kind of growth that Twitter's early investors predicted when the company went public in November 2013?
In a note to investors on Monday, SunTrust media analyst Robert Peck downgraded Twitter to neutral from buy arguing that user growth and engagement continues to be "challenged" and that recent efforts to increase revenues "can only go so far."
Monness Crespi media analyst James Cakmak agreed with Peck, similarly cutting his rating on a lack of confidence in Twitter's growth strategy. Whether Twitter can become more than a niche medium remains investor's quandary.
There are reasons to believe that Twitter's slow growth may be permanent. In the first quarter of 2016, Twitter averaged 310 million monthly active users though data projections from eMarketer indicate user growth is decelerating, exponentially. The company predicts that worldwide users will rise at an 8.8% in 2017, 7.6% in 2018 and 6.2% in 2019.
Twitter suffers from an inability to drive enough advertising revenue to make the company profitable. It takes up a mere 1.4% of net digital ad revenue worldwide, up from 0.9% in 2014 but a far cry from Facebook's 12%.
However, it may have mis-stepped in its attempt emulate Facebook, changing its format, emphasizing suggested accounts to follow and vowing to increase character count, according to Jessica Liu at Forrester Research.
"In doing so, Twitter lost its identity and users struggled with the experience," Liu said.
Twitter CEO Jack Dorsey has heard the criticisms and seems to be taking steps to make the social media platform more user-friendly. Within the past year, Twitter has changed its algorithm so that posts are no longer purely chronological, and said Tuesday it would support larger animated images called gifs.
Twitter's model to livestream content might increase the number of visitors to its platform, but the content will be available to people regardless of whether or not they have a Twitter account.
The deal has the potential to reach two generations of users, said Dayle Rodriguez, a community and marketing manager at Sentab, in a phone interview. The first are older Twitter users who may still uses television to get their news. The second are cord-cutting millennials.
"It might capture a younger audience who will benefit from newscasting and streaming on Twitter's platform," Rodriguez said.
Live streaming also has the potential to capitalize on video advertising. Native advertising on the site, such as sponsored content, is Twitter's main revenue source to date. It has not, however, turned Twitter into a profitable company.
Video ads might be able to do just that. Twitter and Bloomberg will share revenue on advertising packages sold with the videos, and Twitter will air advertisements in-stream during broadcasting and before highlights of the show on Twitter, according to Recode.
Twitter and Bloomberg spokespeople could not be reached for comment.