Twitter (TWTR) Stocks Plummet As Revenues Are Announced


Although the number of Twitter (TWTR) users logging in for their fix of celeb gossip, real-time news, and community conversation continues to grow, investors still seem to be concerned. The Street shared that while Twitter has reported profits in-line with expectations and higher than expected third quarter revenues, user growth has slowed down. Stocks fell almost 11% over the course of Tuesday’s trading.

On an average day, about 25.8 million shares of Twitter (TWTR) stock change hands; today, 58.4 million stocks were traded. This sort of increase in number of stocks traded often concerns analysts and, as such, Twitter’s stock was downgraded by several companies, including RBC Capital, Nomura, Bank of America Merill Lynch and Stifel. JPMorgan Chase and Deutsche Bank, meanwhile, continued to rate the stock as a good buy. JPMorgan Chase felt that a reasonable price expectation for the stock was around $64, and Deutsche Bank expressed that $60 would be appropriate while suggesting that Twitter (TWTR) could greatly increase its ad revenue.

On Monday, Twitter reported that their timeline views per user, which is often used as a measure of engagement, fell 7% over the third quarter. The company’s user growth rate also clocked in around 23% for the quarter, according to the Christian Science Monitor. Last year, before Twitter (TWTR) went public, the growth rate was calculated around 39%.

Valuewalk, meanwhile, suggested that the vast majority (some 80%) of Twitter users connect to the platform through mobile devices. Also, almost 85% of the company’s ad revenue comes from mobile devices, compared to 70% at this time last year. Twitter also offers business advertisers a “promoted tweet” system but, according to Valuewalk, many businesses prefer Facebook ads as Facebook tends to insert ads based on the user’s likes and other information.

Many experts are saying that, to reverse this trend, Twitter will need to show some impressive changes in various parts of its functionality. One new feature that has been met with mixed feelings from the community is that Twitter (TWTR) is adding tweets to a user’s timeline from accounts that they do not follow. According to the Guardian, Twitter’s testing on the subject showed that many people enjoy the opportunity to see tweets they might have otherwise missed while others express concern that this is the first step to a Facebook style management of what a user sees in their feed.

Meanwhile, Facebook announces its earnings tomorrow and many investors are waiting to see what happens to the market at that point.

All in all, many investors seem happy with the performance of Twitter (TWTR) stock and are just waiting to see what comes next.

[Image from Wikimedia]

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