By Sophie Estienne, AFP
NEW YORK –Twitter shares took a nosedive Thursday after the company’s first earnings report shook up investors expecting strong growth at the messaging platform. The shares closed down 24 percent at US$50.03 a day after Twitter reported a US$511 million quarterly loss and only sluggish growth in the number of users. The figures “show signs of slowing user growth and engagement … suggesting that Twitter may be finding it more difficult to capture a more mainstream audience,” said Morgan Stanley analyst Scott Devitt in a research note. Stifel analyst Jordan Rohan downgraded Twitter, noting that “user growth metrics faltered.”
“The company did a poor job explaining how and why the lower user growth was a temporary phenomenon,” Rohan added. A ‘show-me story’ A similar warning came from Cantor Fitzgerald, where analyst Youssef Squali and colleagues said that “Twitter has all of a sudden become a show-me story in the same way Facebook was challenged to prove its mobile credentials over a year ago.” “We now know how Facebook turned out, but we won’t know how Twitter will fare for at least several quarters,” Squali said in a research note. The first earnings report since Twitter’s vaunted public offering in November offered a cold dose of reality for the company. The results showed revenues in the quarter that ended Dec. 31 doubled from a year ago to a better-than-expected US$242.6 million. But the number of worldwide users was up just nine million from the figure of 232 million when Twitter went public in November, suggesting only modest growth at a time when investors were looking for a surge. Twitter said the loss for the year widened to US$645 million from US$79 million in 2012, even as revenues more than doubled to US$664 million for the full year.