Friday 24 November 2017

Twitter shares tumble 23pc on earnings

The Twitter logo is displayed on the floor of the New York Stock Exchange. Reuters
The Twitter logo is displayed on the floor of the New York Stock Exchange. Reuters

Sarah Frier

SHARES in Twitter tumbled yesterday amid signs that the microblogging service that amassed more than 200 million users in seven years is now struggling to widen its audience as quickly.

The San Francisco-based social network's shares fell yesterday after Twitter posted its first earnings report on Wednesday evening since going public in November.

Monthly active users totalled 241 million in the fourth quarter, up 30pc from 185 million a year earlier, and slower than 39pc in the prior period. Usage also dipped, with 148 billion views of Twitter timelines compared with 159 billion views in the third quarter.

While chief executive Dick Costolo said in an earnings call that he is focused on reversing the trend, Twitter's stock plunged as much as 23pc in early trading.

The results raised concerns that Twitter's easy growth phase is ending. As recently as a year ago, Twitter, which began in 2006 and lets people communicate through 140-character messages, was adding new users at rates of more than 60pc a year, and timeline views were soaring.

If the usage declines continue and new members join more gradually, the unprofitable company may fall short of its goal to be a mainstream service like Facebook and may find it difficult to justify its $34.7bn (€25.5bn) market capitalisation.

Irish Independent

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