Twitter user growth slide drives stock to lowest since Wall Street debut

Twitter fell as low as $37.24 a share, the lowest since it started trading, and was down 9.8% to $38.45 

 

Twitter reported a $132.4 million loss for the quarter, or 23 cents per share. Photo: AP

San Francisco: Twitter Inc.’s slowing user growth pushed the stock to the lowest since last year’s market debut. The company on Tuesday said that membership in the first quarter reached 255 million, with year-over-year growth decelerating to 25% from 30% in the previous period. The stock plunged as much as 13% in early trading even as sales more than doubled to $250 million, topping analysts’ estimates.

Twitter’s efforts to move past microblogging and into image and video sharing have failed to spur a surge in users in a market where Snapchat Inc. and Facebook Inc.’s Instagram application are gaining popularity. The company needs more consumers adopting the service and staying on longer as it vies for marketing dollars in web and mobile advertising.

“Wall Street is laser-focused on that user number,” said Thomas Forte, an analyst at Telsey Advisory Group in New York. “For Twitter to maximize its value as investment they need to get in front of as many people as possible and do a good job of monetizing that audience.”

Twitter’s stock plunge magnifies recent drop of many Internet stocks, with Linkedin Corp. and Google Inc. also down on Wednesday and for the year. Investors are questioning whether the web companies, many of which are richly valued, can keep up revenue expansion. The Nasdaq Internet Index is off 18% from a March peak, hovering close to the threshold for a bear market.

Twitter fell as low as $37.24 a share, the lowest since it started trading in November, and was down 9.8% to $38.45 as of 11:35am New York time.

No appetite

“The appetite for growth stocks has just completely unravelled in the last few weeks, and Twitter is at the top of that list,” said Rob Sanderson, an analyst at MKM Partners LLC.

Twitter’s chief financial officer Mike Gupta said on a conference call with analysts that the San Francisco-based company has no plans to pursue a secondary share sale.

Twitter’s net loss widened to $132.4 million, or 23 cents a share, from $27 million, or 21 cents, a year earlier. Excluding some items, the company broke even, beating the three-cent loss predicted by analysts. Even as user growth slowed, people viewed their Twitter timelines more often, with 157 billion views, up 15% from a year earlier. 

 

NITESH KUMAR SINGH

PGDM 2ND 

SOURCE-- MINT LIVE NEWS