Street spooked by Twitter user blues

Twitter failed to attract more monthly users in the second quarter, alarming investors looking for evidence that the company is on a sustainable long-term growth path.

Shares tumbled 14 percent, to $16.84, the most in nine months, even as quarterly revenue topped analysts’ projections.

A long-term turnaround depends on Twitter expanding its audience. That number stands at 328 million monthly active users — the same as in the prior quarter, the San Francisco company said Thursday.

Revenue fell 4.7 percent, and the company’s net loss also widened, affected by a $55 million writedown of the value of its investment in the German music streaming service SoundCloud.

Twitter is still working to prove that it can build a sustainable, growing business. After hitting a plateau with its user base and struggling with a slowdown in sales, the company started narrowing its focus, shuttering businesses and teams that didn’t fit its goal of being a destination for live-event content.

Monthly active users in the US, Twitter’s most important advertising market, declined to 68 million from 70 million in the prior quarter.

“It’s a niche platform,” said Brian Wieser, an analyst at New Yorkbased Pivotal Research Group. “It always was and always will be.”

US advertising revenue also fell 7 percent to $335 million as Twitter struggles to compete with Google and Facebook, which account for most of the growth in digital advertising.

Although its monthly audience failed to grow, Twitter said there’s room for optimism because 12 percent more users are visiting the site on a daily basis than in the same quarter last year.