Twitter's Share Price Drops By 24% - Piranha Digital

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Twitter’s Share Price Drops By 24%

By piranha

8th May 2015

Last week, Twitter lost 24% of its market worth, which is equal to $8bn. This drop came after leaked Tweets revealed the company’s quarterly results had not met expectations.

Selerity, an independent company that crawls websites for financial data and information, leaked the figures. They posted the early announcement on Twitter’s investor-relations page.

The results showed that Twitter’s new advertising feature received much less interest than expected. Over the past few months, Twitter has been encouraging users to invest in their advertising service in a bid to boost their profits.

Investors are not only concerned with the slowing user growth but also the fact that the company is struggling to make money from their users.

Twitter should have announced their quarterly figures at the close of trading on the New York Stock Exchange. This would have given investors time to examine and digest the information before making any important decisions.

The social media platform’s CEO, Dick Costolo, said:

“While we exceeded our EBITDA target for the first quarter, revenue growth fell slightly short of our expectations due to a lower-than-expected contribution from some of our newer direct response products.”

“It is still early days for these products, and we have a strong pipeline that we believe will drive increased value for direct response advertisers in the future. We remain confident in our strategy and in Twitter’s long-term opportunity, and our focus remains on creating sustainable shareholder value by executing against our three priorities: strengthening the core, reducing barriers to consumption and delivering new apps and services.”

Twitter is under a lot of pressure to compete with the likes of Facebook and Instagram, especially when it comes to advertising. They will need to restore the faith of investors if they want to continue to improve the service for its users.

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