Twitter hammered in after hours trading over slow growth concerns

[Shawn Knight]

Twitter on Tuesday posted first quarter earnings that reveal a thriving advertising business but investors were more focused on its slow user growth. The microblogging platform attracted 255 million monthly active users for the quarter which represented growth of just 5.8 percent compared to the previous quarter.

That’s up from the decreasing pace of user growth over the course of 2013 but Wall Street was hoping for more – in the 257 million range according to MarketWatch.

Twitter CEO Dick Costolo offered little explanation for the growth, saying there was no specific thing or change that contributed to the majority of growth. Instead, it was a combination of some of the improvements they’ve made to their recommendations and their global rollout.

User growth aside, Twitter turned in $250 million in revenue which is a 119 percent increase compared to the year-ago period. Of that, $226 million came from ad revenue while the remaining $24 million came from data licensing programs. But even these figures weren’t enough to keep investors happy and they let the company know in after hours trading.

As of writing, Twitter share value is down more than 11 percent which puts the total value at $37.83 per share. That’s an all-time low for the stock since going public last November when it opened at $45.10 after pricing at $26 the night before.

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https://www.techspot.com/news/56582-twitter-hammered-in-after-hours-trading-over-slow-growth-concerns.html

 

[Guest]

Infinite growth - holy grail for investors. Now it's not enough to have stable financial situation, it's important to have more and more and more uses, who doesn't use service and doesn't bring more money to company. I guess some people will do anything to make any company look bad, cause that's now "in", to be negative and find any, however silly, reason to be negative.

 

[Guest]

Exactly, financial stability be damned, just get us MORE, MOREEEEE!!!

 

[Skidmarksdeluxe]

If I were an investor I wouldn't be happy either, there's a slight chance that I'd have to look for a job and that would never do. Why should I work when I can make a fortune off the back of others.

 

[MilwaukeeMike]

Infinite growth - holy grail for investors. Now it's not enough to have stable financial situation, it's important to have more and more and more uses, who doesn't use service and doesn't bring more money to company. I guess some people will do anything to make any company look bad, cause that's now "in", to be negative and find any, however silly, reason to be negative.

It's tempting to explain how growth is only one part of investing, or how that the company's future is more important than it's current earnings (see Tesla), or how there are companies that are surprising investors and doing well (see the Samsung story from 4 days ago https://www.techspot.com/news/52383...-lead-samsung-to-record-quarterly-profit.html and that being negative isn't a trend. But I feel like I'd be wasting my time.

Twitter, like FB, will have trouble growing because they make money from doing something that gets in the way of the reason people use their service. Ads detract from the experience of using a social network. How can you grow when your primary service isn't your source of revenue?

 

[davislane1]

If I were an investor I wouldn't be happy either, there's a slight chance that I'd have to look for a job and that would never do. Why should I work when I can make a fortune off the back of others.

Take it from a derivatives trader, short-term speculation (what I do) and long-term speculation (investing) aren't the cushy, easy money occupations advertised by pop culture. Unless high stress, thousands of hours of research, no legally binding guarantee of payment for your time*, and the possibility of losing all you have if you can't adapt to changing market conditions is cushy.

More importantly, people trading a company's common stock, bonds, etc. is a valuable tool for businesses. Without droves of "lazy rich people" to sell financial instruments to, they'd have to take out much costlier bank loans to finance their operations. Without people trying to "make a fortune off their backs", securities-issuing companies like Twitter would need to take on significantly more risk to grow...Increasing their likelihood of failure.

*This is obviously different if you work for a firm and are paid for things other than pure performance.

 

[Skidmarksdeluxe]

Take it from a derivatives trader, short-term speculation (what I do) and long-term speculation (investing) aren't the cushy, easy money occupations advertised by pop culture. Unless high stress, thousands of hours of research, no legally binding guarantee of payment for your time*, and the possibility of losing all you have if you can't adapt to changing market conditions is cushy.

More importantly, people trading a company's common stock, bonds, etc. is a valuable tool for businesses. Without droves of "lazy rich people" to sell financial instruments to, they'd have to take out much costlier bank loans to finance their operations. Without people trying to "make a fortune off their backs", securities-issuing companies like Twitter would need to take on significantly more risk to grow...Increasing their likelihood of failure.

*This is obviously different if you work for a firm and are paid for things other than pure performance.

Lol. I would 'like' this but apart from your last paragraph I haven't the vaguest idea what you're saying. As you can no doubt tell I have as much interest in stock markets as I have watching paint dry but whatever you've tried to explain I'll just take your word.

 

[Guest]

0 earnings and slowing growth, sounds like another tech bubble winner. Remember that you can't divide by zero.

 

[davislane1]

Lol. I would 'like' this but apart from your last paragraph I haven't the vaguest idea what you're saying. As you can no doubt tell I have as much interest in stock markets as I have watching paint dry but whatever you've tried to explain I'll just take your word.

Clarification of 1st paragraph: I understood your first comment in the context observed on most of the Internet, "Traders/investors get rich off the backs of others without doing any work themselves." What I was saying is that this is largely a false belief.

 

[Skidmarksdeluxe]

Clarification of 1st paragraph: I understood your first comment in the context observed on most of the Internet, "Traders/investors get rich off the backs of others without doing any work themselves." What I was saying is that this is largely a false belief.

(y)