Investors finding some hope in Twitter
More than a year into Twitter’s efforts to turn around the company under the leadership of Jack Dorsey, its business is shrinking. And yet, investors seem to have finally been given a glimmer of hope for the future.
But first, the bad news. On Wednesday, Twitter reported its first fall in revenue since its initial public offering in 2013, posting sales of $548 million in the first quarter, down 7 percent from a year earlier. But that beat investors’ low expectations.
Twitter also surprised investors in another crucial area, adding 9 million users in the first quarter, for a total of 328 million active users monthly. That is a 6 percent increase from the previous year.
Investors took kindly to the news, and Twitter shares rose 7.9 percent.
It is a bright spot of news for the beleaguered company, which has struggled to maintain growth even as other social media companies have seen their popularity and user numbers surge.
Twitter has also had to contend with Facebook mimicking its strengths — like providing a platform for breaking news and celebrity influencers — while it has struggled to convince advertisers that its 140-character messaging service is the best place for people to see what’s happening in the world.
The goal for Twitter is to translate its enormous impact on media and culture, and the preferred means for President Donald Trump to communicate, into a profitable business.
“By Wall Street standards, Twitter’s a diving joke. A company that’s hit a financial wall with no obvious upside,” Bob Lefsetz, a media industry analyst, told his subscribers. “By cultural standards, it’s a juggernaut, far exceeding the impact of Facebook and Snapchat, even Instagram.”