Business Technology

Wednesday 13 November 2019

Twitter shares nosedive after growth stalls

Jack Dorsey, Founder and CEO of Twitter
Jack Dorsey, Founder and CEO of Twitter

James Titcomb

Social network reveals that it signed up just 4m new users in the last three months, sending shares down 13pc.

Twitter’s user growth has ground to a near-halt, the company has revealed, sending shares in the struggling social network down 13pc.

The microblogging service's monthly active users have grown by just 4m in the last three months, reaching 320m at the end of September, Twitter said on Tuesday night. Excluding those who only access Twitter via text message, users increased from 304m to 307m.

This is around a fifth of Facebook’s monthly users and much less than both Instagram and WhatsApp, which are still growing strongly. Twitter has struggled to maintain the interest of users, hundreds of millions of whom are believed to have signed up and then abandoned the service.

Earlier this month, Twitter's founder Jack Dorsey returned as the company's permanent chief executive, hoping to engineer a turnaround by launching new features that make it easier for new users to get to grips with Twitter.

These include Moments, a new service that packages hand-picked tweets about a certain event or news story together, replacing the real-time feed of messages that has defined Twitter since it was released in 2006. The company is planning a major advertising campaign to promote the new feature.

Despite disappointing user growth, Twitter's revenues improved markedly in the quarter to September 30, rising from $361.3m to $569.2m. The company remains significantly lossmaking, although the deficit narrowed from $175.5m to $131.7m.

However, the company's revenue guidance for the next quarter fell well short of forecasts, which caused shares to plummet in after-hours trading.

“We continued to see strong financial performance this quarter, as well as meaningful progress across our three areas of focus: ensuring more disciplined execution, simplifying our services, and better communicating the value of our platform," Mr Dorsey said.

Mr Dorsey recently announced a significant round of layoffs that will see 8pc of the company's workforce cut.

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