Twitter Inc. (TWTR) unveiled the launch of Twitter Blue, the social media company’s first subscription offering, which will provide exclusive benefits to users for a monthly fee.
The product launch signifies a giant leap for the company as it adds a new source of revenue, diversifying from its core business of selling advertisements, which comprised 86% of the company’s revenues in Q1.
The new subscription product, which will be launched initially in Australia and Canada, will charge users $4.49 and $3.49 in local currencies per month, respectively.
Users subscribing to Twitter Blue will be permitted to access a new Undo Twitter feature, which will allow them to set a customizable timer of up to 30 seconds to edit a tweet. (See Twitter stock analysis on TipRanks)
The U.S. launch date is yet to be announced and is expected to cost $2.99 per month.
Twitter Blue also offers other features like bookmark folders, reader mode, and a customizable Twitter app icon on subscribers’ phone screens.
Earlier this year, Twitter laid out its plans to add 315 million monetizable daily active users to help generate annual revenues of $7.5 billion by the end of 2023.
Following the Twitter Blue announcement, Mizuho Securities analyst James Lee reiterated a Hold rating and a price target of $65 (14% upside potential) on the stock.
Lee believes that the new subscription service could modestly beat sales estimates for 2022 based on the assumption of a complete rollout in the next six to 12 months.
Overall, the stock has a Hold consensus rating based on 7 Buys, 18 Holds, and 1 Sell. The average analyst price target of $68.04 implies 19.4% upside potential from current levels. Shares of TWTR have jumped 69.1% over the past year.
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