Twitter shares drop on faltering user growth
February 11, 2016, 12:14 pm

Shares of Twitter fell in after-hours trading as the company`s quarterly results showed user growth faltering.

Twitter reported a net loss of $90m (£62m) for the last three months of 2015 versus a loss of $125m a year ago.

The social media site saw its user growth stall, with 320 million average monthly active users - the same number as the previous quarter.

This is the first quarter in Twitter`s history that the number of monthly active users has not grown.

Revenue for the quarter rose by 48% to $710m compared to the fourth quarter of 2014, matching analysts` expectations.

Immediately after the results were announced, Twitter shares fell 10% in after-hours trading, before recovering to a 3% loss.

"With no increase in new users, but otherwise good financial performance, Twitter hasn`t yet shown how it can rise from the troubling spot of not being able to grow the business," said Brian Blau, research director at Gartner.

Rival social media sites have seen their user bases grow. Facebook has 1.5 billion users and Instagram has 400 million, despite launching four years after Twitter

In its results, Twitter said its user base increased in January.

Investors were also disappointed in Twitter`s revenue forecast for the first quarter of 2016. The company projected revenue for the first quarter ranging between $595m and $610m, well below analysts` estimates of $627m.

Product changes

Investors had been anticipating the announcement of major changes to Twitter`s product offerings to increase the user base.

The company announced earlier on Wednesday that it would be introducing a new feature that shows the best tweets at the top of a user`s feed, rather than showing tweets in reverse chronological order.

Some users felt the change would kill the social network and began to use the hash tag #RIPtwitter in protest.

The company said it was planning on improving its video offerings, building on the launch of its live video streaming product, Periscope, in March.

Twitter shares have more than halved since its chief executive Jack Dorsey - one of the site`s founders - returned to Twitter in July.

The company has never reported a quarterly profit.

Comments

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  • Pety
    April 3, 2016, 1:26 pm
    TW was good at the beginning === now is full with SPAM
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