Advertisement
Share

Twitter shares plunge day after chief executive admits problems

Twitter shares fell hard July 29, after the latest update from the one-to-many messaging platform revived doubts about its growth prospects.

Twitter shares fell hard July 29, after the latest update from the one-to-many messaging platform revived doubts about its growth prospects.

(Emmanuel Dunand / AFP)

Twitter Inc. shares plunged to their lowest point in more than a year early Wednesday, a day after interim chief executive and co-founder Jack Dorsey bluntly told analysts the social media platform faces serious problems.

Company stocks were down about 13% trading at $31.90 by noon in New York after closing at $36.54 the day before.

SIGN UP for the free California Inc. business newsletter >>

Dorsey surprised analysts Tuesday by criticizing the company for a lack of focus, unintuitive service and difficulties communicating the value of using Twitter.

Advertisement

Dorsey, who was reappointed chief executive a month ago after the resignation of Dick Costolo, added that Twitter’s new products had failed to produce any “meaningful impact” on user growth.

It is “unacceptable and we’re not happy about it,” Dorsey said.

The comments came right after Twitter reported sound second-quarter earnings. At $502 million, revenue was up 61% compared with a year early and well above analyst estimates of $481 million.

Those numbers failed to satisfy investors Wednesday on the heels of Dorsey’s candid remarks. Wall Street has long complained that Twitter is not adding users fast enough or introducing enough money-making tools.

Twitter’s average monthly active users, a key measurement of growth, totaled 304 million core users, up just 2 million from the first quarter.

Interested in the stories shaping California? Sign up for the free Essential California newsletter >>

Anthony Noto, Twitter’s chief financial officer, said during Tuesday’s call with analysts that the company does not expect any meaningful growth in the near term.

“We have not yet reached the cohort of users known as the mass market,” Noto said. “Non-users continue to ask: Why should I use Twitter?”

Follow @dhpierson for tech news.

ALSO

Twitter posts huge 61% revenue increase in second quarter

Rising global debt is increasing the risk of another financial crisis

Billionaire Soon-Shiong’s NantKwest surges 39% in first day of trading


Advertisement