The social network had a worse quarterly performance than Amazon.
Twitter tumbled 10 percent on Tuesday after reports of sluggish user growth and weak projected fourth quarter sales spooked investors.
The company finished the third quarter with 284 million active users, which was just a 5 percent gain, compared to a 6.3 percent gain in the second quarter due to heavy promotion during the World Cup, according to CNN Money.
Those second quarter results propelled it upward 20 percent the next day after they were reported in late July, and shares continued to improve despite hiccups in the last two months, but the third quarter results sent those figures plummeting back to Earth. Overall, the stock is down 32 percent this year to $42.39, making it the worst performer among top technology companies, even beating out struggling Amazon.com after it also reported disappointing third quarter results and a poor fourth quarter.
Twitter has struggled to achieve the kind of success that Facebook has, as it has only a quarter of the users of the social network king. It suffers from the fact that it is not the day-to-day necessity that Facebook is, and users still rely on Facebook for news more than they do Twitter.
And despite Twitter’s promising revenue growth — it doubled in the third quarter — the company has failed to demonstrate lasting profitability. It reported a net loss of $175.5 million in the most recent quarter.
Twitter’s most recent profits were just $7 million, amounting to just a penny per share, whereas Facebook expects to post an $824 million profit when its results come out.
Twitter’s annual growth in the third quarter was 114 percent, or $361 million, which outperformed initial guidance by about $20 million. Although profitability also exceeded expectations, investors could not shake off the worrying signals for the company.
Leave a Reply