Twitter shares knocked off perch as investors take flight

SHARES in social media company Twitter took another big tumble yesterday after investors digested a poor monthly update and downbeat comments from its co-founder Jack Dorsey.

The US group saw its shares lose a further 13.49pc after an 11pc fall on Tuesday, when it said that the number of its monthly average users grew at the slowest pace since it went public in 2013.

Its struggle to increase its audience has worried investors, who are concerned about the firm’s growth potential.

Dorsey took the helm after outspoken chief executive Dick Costolo stepped down at the beginning of this month.

Twitter said the number of users in the second quarter increased to just 304m, up from 302m in the previous quarter.

The company is often compared with Facebook and the pressure to grow at a similar pace is said to have distracted executives who are thought to be obsessed with the rivalry.

The company has been under the microscope since going public in late 2013. Investors now worry it may have hit a plateau. Costolo had faced criticism for instigating changes to the executive team, which included various alterations to the board as well as removing chief operating officer Ali Rowghani.

The poor monthly data on users overshadowed the company’s second-quarter earnings and revenue, which exceeded expectations, and its bullish projections for future revenue.

Investors took fright at comments from the senior team suggesting that boosting growth would be a long process.

Shareholders were spooked as executives did not bother to sugar-coat the difficulties which the business faces.

Finance director Anthony Noto, said: ‘We have not clearly communicated Twitter’s unique value. And as a result non-users continue to ask, “Why should I use Twitter?”

‘Simply said, the product remains too difficult to use. We do not expect to see sustained meaningful growth [in monthly active users] until we start to reach the mass market.’