Twitter stock sinks on user growth worries

Feb 6 2014, 12:32pm CST | by

Twitter stock sinks as 4th-quarter numbers trigger worries about slowing user growth

NEW YORK (AP) — Twitter's stock is sinking on worries that the short online messaging service is not popular enough.

Twitter Inc. had reported stronger-than-expected revenue and adjusted earnings in its fourth-quarter financial report Wednesday, its first as a publicly traded company.

But its user numbers signaled that growth is slowing. Twitter had 241 million users at the end of 2013. The company added just 9 million new monthly users in the fourth quarter, only 1 million of which came from the U.S. It was adding an average of 16 million new accounts in each of the first three quarters of the year.

Another closely watched metric, which measures how engaged users are with Twitter, declined during the quarter, further spooking investors. Twitter said its "timeline views," or how many times users refresh Twitter feeds, visit Twitter or look at search results, declined 7 percent from the previous quarter, to 148 billion from 159 billion.

CEO Dick Costolo sought to reassure analysts and investors during Wednesday's conference call, saying that changes Twitter made to the short messaging service during the fourth quarter are starting to pay off.

But the concerns remained. Sterne Agee analyst Arvind Bhatia cut his rating on Twitter's stock to "Underperform" from "Neutral" because of the slowing growth. He also said its stock is expensive compared to similar companies. He set a target price of $43 for Twitter's stock. This is still more expensive than Facebook and LinkedIn, based on expected revenue for the companies, the analyst wrote in a note to investors.

San Francisco-based Twitter's stock had soared following its November initial public offering, causing many analysts to call it too expensive. Having priced at $26 on the eve of its IPO, Twitter's stock peaked at $74.73 on Dec. 26.

The stock fell $13.88, or 21 percent, to $52.09 in midday trading on Thursday.

Other analysts are a bit more optimistic. Baird analyst Colin Sebastian increased his target price on Twitter's stock to $55 from $48 and said the company issued a "solid first report despite slower user growth." He said that Twitter's platform has "enormous potential" to attract advertisers.

Source: AP Business

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Associated Press</a>
The Associated Press (AP) is one of the largest and most trusted sources of independent newsgathering, supplying a steady stream of news to its members, international subscribers and commercial customers.

 

blog comments powered by Disqus

Latest stories

Need for Speed Reboot is Coming This Fall
Need for Speed Reboot is Coming This Fall
EA will release a complete new Need for Speed this fall. The video game giant just released a teaser video and the first Need for Speed Gameplay video will be revealed in June.
 
 
Google Self-Driving Cars to Hit Public Roads this Summer
Google Self-Driving Cars to Hit Public Roads this Summer
Google announced today that Google Car prototype vehicles will leave the test track and hit the familiar roads of Mountain View.
 
 
Google Search Analytics Launched in Web Master Tools
Google Search Analytics Launched in Web Master Tools
Google officially announced the new Search Analytics feature in Webmaster tools.
 
 
T-Mobile Hits Verizon with new 'Never Settle Trial' Campaign
T-Mobile Hits Verizon with new 'Never Settle Trial' Campaign
In case customers don't feel satisfied, T-Mobile will pay for them to shift back to Verizon