Hot Stock Minute

Sponsored by

Twitter tanks on slowing user growth

Hot Stock Minute
.

Twitter plunges

Are users falling out of love with Twitter (TWTR)? In far fewer than 140 characters: yes. The company reported its fourth consecutive quarter of slowing user growth. The company added just 9 million new monthly active users in the quarter. That was a gain of 3.8%, far less than the 6.4% in the previous period.

Another measure of the cooling love fest between Twitter and its users is a measure the company created to guage usage for advertisers, called “timeline views.” The company records how often a user refreshes their twitter page as an indicator of how much content they’re consuming. That measure slid for the first time.

Investors were also falling out of love this morning. Shares of Twitter were down 22% in early trading, wiping out three-quarters of a billion dollars in market value. Shares are selling off despite the fact that Twitter beat earnings and revenue expectations, posting earnings of $0.02 a share and revenue of $243 million.

Twitter has 241 million users, compared to Facebook’s (FB) 1.2 billion. Facebook also reported slower user growth in its latest quarterly report. Facebook saw growth of 3.4% to Twitter’s 3.8%. Even when today’s sell off is factored in, shares of Twitter have still doubled in price since its IPO in November of 2013. Facebook, meanwhile is up about 60%.

View Comments