TWLO Seeking Alpha

There’s a recent article posted on Seeking Alpha by Paul Santos, stating that TWLO has structural problems. From his article, (…)

"…around 90% of Twilio’s business (before the SendGrid acquisition) consisted of reselling regular voice calls, SMSs, and telecom services…This is not just in value but in actual usage. Said another way, Twilio is growing in a shrinking pond.

Let me show you how the above is a reality already. I’ll use China Mobile (CHL) data since U.S. telecoms typically don’t like reporting stuff that reads negatively.

China Mobile, of course, is adding customers much faster than your typical U.S. telecom. China Mobile is a mobile telecom operator (the largest in China and also the world). In fixed telephony, voice will be falling even faster. Here’s how things look like, first on absolute usage: ( He has a chart showing falling voice usage.)

As I said, China Mobile has had (and still has) more room for growth than your typical U.S. telecom company. Hence, these trends, already very evident in China Mobile, will be much more developed in a typical U.S. telecom provider. That is, voice and SMS usage will be more challenged still.

Why are these trends in place? For a very simple reason: ( He has a charts showing falling voice usage, among other charts.)

Messaging and communications, in general, are migrating towards services which use data, instead of the legacy voice and SMS services. Think about messaging apps like WeChat, WhatsApp, Facebook Messenger, Signal, Telegram, etc. Think also about in-app messaging capabilities (posts, direct messages). Think also, for many usages, in-app notifications (instead of a SMS) or app security schemes (also instead of a SMS).

This trend is set to continue. Conceivably, the legacy services can even become obsolete, and all usage can become data-based usage. Therein lies the tremendous structural problem Twilio faces…

Disclosure- I know nothing about TWLO, just sharing an article I recently came across.



This author is a short on TWLO and this is not the first time he wrote something negative about it. Last time he wrote about TWLO, we discussed here.

From seeking alpha:

Disclosure: I am/we are short TWLO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.


I agree with Kevin, this is a short attack article and demonstrates that the author does not truly understand TWLO. His assessment of TWLO as a VoIP provider shows he does not understand, or does not truthfully articulate, that TWLO strength and value is inn its software.


This isn’t the only stock he’s shorted, posted a bear article, and got strong rebuttals from people who know the company’s sector.