Twitter has seen a six per cent rise in its share price after an analyst reported the company’s strength in the video advertising stakes.
USA Today reports that the firm’s stock rose by $3.85 [£2.34] to $67.50 [£41.12] after a favourable report from Evercore Partners that talked up the success it is having with digital video advertising.
"What places Twitter in such strong company is the combination of its immediacy and the support that it is receiving from the traditional TV industry," said Ken Sena, analyst at Evercore Partners, in an investor note.
Evercore followed this up by increasing its stock target for Twitter from $52 [£31.68] to $70 [£42.64] with this also helping to enhance confidence in the micro-blogging service.
Twitter has only been trading on the New York Stock Exchange [NYSE] since 7 November when shares started at $45.10 [£28], which meant the firm was valued at a weighty $25 billion [£15.5 billion]. This was a huge increase from the initial public offering [IPO] price of $26 [£16.17] set on the day before trading began for real.
Digital video advertising is an industry that is increasing at a rate of knots with eMarketer estimates putting the market’s worth at $4.15 billion [£2.53 billion] in 2013 – an increase of 43.5 per cent compared with the previous year.
In terms of the current year, it’s expected that spending will hit $5.79 billion [£3.53 billion] representing an increase of 39.5 per cent and partly down to the fact that new trends will emerge with Twitter-owned Vine pegged as one particular success story.
Facebook launched its own video ads late last year as web and mobile users of the social network started to see videos appear that played automatically but had the sound muted.
The two social networking giants’ growth into the video advertising sector is the latest attempt to capture some of the TV advertising that is worth in excess of $66.4 billion [£40.8 billion] in the US.