Twitter Stock Plummets Following Q1 Earnings, Worries Over User Growth
Twitter shares dropped approximately $4--close to 10%--following the release of their first quarter earnings Tuesday, according to CNBC. The company's reported revenue of $241.5 million did not seem to be enough, according to Techcrunch.com, as despite the company’s rapidly-expanding earnings, investors are concerned that Twitter’s days of massive user growth are over, predicting lower future top and bottom line growth.
COO Ali Rowghani--who was hired in great part to reverse Twitter’s slowing user growth--said in an interview with the Wall Street Journal that despite Twitter’s approximately a quarter of a billion users, the company could do a better job of explaining what users can get out of the social media giant.
Twitter reported that it had 255 million monthly active users. Last quarter, it had reported 241 million monthly active users. That growth of 14 million users in the three-month period translates to roughly 5.8% growth, a figure that Wall Street and investors say needs to accelerate.
The Journal’s online blog cites that just one in five people in the U.S. with an Internet connection use Twitter regularly, compared with more than half the U.S. online population that is on Facebook.
Businessweek.com writes that Twitter’s user growth challenge can be characterized in less than 140 characters: “Grow the user base faster and enlist more engaged, mainstream users i.e. #BeMorelikeFacebook.”