Friday 20 April 2018

Twitter shares fall over 10pc as stagnant user growth disappoints investors

Twitter Business Desk

Twitter shares fell over 10pc in premarket trading as the firm's stagnant monthly active user growth for Q2 disappointed investors.

Despite investments in features and live content in a drive to increase users and engagement, the social media platform has struggled to strengthen its user growth.

Other popular social giants in the market like Facebook and Snapchat owner Snap are really competing with Twitter for advertising dollars.

Facebook’s mobile advertising business grew by more than 50pc in the second quarter, the company said in its earnings report this week.

Facebook, which now has more than two billion regular users, has been squeezing more ads into its Facebook News Feed while adding more ads to its photo-sharing app Instagram, which has more than 700 million users.

Meanwhile Twitter had 328 million average monthly active users (MAU) in the three months through June 30, a figure unchanged from the previous quarter.

Shares at the microblogging platform rose 40pc since mid-April when Twitter reported a better-than-expected MAU figure surplus of 9 million.

US President Donald Trump has tweeted multiple times a day on average since his inauguration in January.

"If you really can't accelerate MAU interest given the daily tweets from POTUS, not sure when you will," said Michael Nathanson, senior research analyst of MoffettNathanson Research, referring to U.S. President Donald Trump's frequent use of Twitter.

Twitter's second-quarter net loss widened as it took a $55m impairment charge related to an investment writedown and revenue fell 4.7pc.

Advertising revenue fell 8pc to $489m, but well exceeded the $458.1mm estimate.

The company's net loss widened to $116.5m, or 16 cents per share, in the second quarter ended June 30, from $107.2m, or 15 cents per share, a year earlier.

Revenue fell about 4.7pc to $573.9m, the second time it has fallen since Twitter's debut in 2013.

Shares of Twitter fell more than 10pc to $17.63 in premarket trading on Thursday.

Additional reporting from Reuters

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