Flat user growth sends Twitter stock downhill
bengaluru — Twitter shares tumbled more than 10 per cent in premarket trading on Thursday after the social media platform disappointed investors with stagnant monthly active user growth in the second quarter.
Despite its appeal among celebrities and public figures, Twitter has struggled to sustain its closely watched user growth even as it invested in features and live content to help draw viewers and boost user engagement. It is in stiff competition for advertising dollars with other platforms like larger rival Facebook and Snap’s messaging app Snapchat.
Twitter had 328 million average monthly active users (MAU) in the three months through June 30, unchanged from the previous quarter. Analysts were expecting 328.8 million, according to financial data and analytics firm FactSet.
Twitter shares had run up some 40 per cent since mid-April as investors bet on another quarter of growth after the microblogging service reported that it added nine million more monthly active users than expected in the first quarter.
“If you really can’t accelerate MAU interest given the daily tweets from POTUS, not sure when you will,” said Michael Nathanson, senior research analyst of MoffettNathanson Research, referring to US President Donald Trump’s frequent use of Twitter.
Trump, one of the most active politicians on Twitter, has tweeted multiple times a day on average since his inauguration in January, according to social media analytics company Zoomph.
“The positive contributions to MAU growth from product improvements in the second quarter were offset by lower seasonal benefits and other factors, resulting in flat MAU quarter-overquarter,” said chief operating officer Anthony Noto during a conference call with analysts.
In the United States, Twitter’s average monthly active users declined to 68 million in the second quarter from 70 million in the first quarter. —