Twitter Inc. made an official statement yesterday, reporting decreasing user growth. The user growth declined to 25% in comparison to the 30% growth posted in the previous period, as the company got 255 million active users over the first quarter of the current financial year.
The Chief Executive Officer of Twitter – Mr. Dick Costolo said in the companys statement, which was cited by the Financial Times that this was a “very strong first quarter” for the company. He also said in an interview for Bloomberg: “The distribution and consumption of tweets around the world is already mainstream. Now, what we’re in the process of doing is working to increase the value of the logged-in experience.”
Mr. Costolo added in an interview for the Financial Times: “Revenue growth accelerated on a year-over-year basis fuelled by increased engagement and user growth. There are some more secular trends. A number of companies have had some fairly exceptional earnings and their stock has dropped so I’m not sure what might be happening.”
The decreasing user growth leaves investors with the impression that the company wont be able to reach Facebooks size. Another problem, which the company has been currently facing is the fact that unlike its major rival Facebook Inc., Twitter has not managed to attract as many mainstream users as Mark Zuckerbergs social network. On the other hand, Twitter proved to be quote attractive for a large number of celebrities and journalists.
The company also shared that its sales more than doubled and reached 250 million dollars, surpassing analysts expectations. The companys net loss increased from 27 to 132.4 million dollars. However, the company was proud to reveal that Twitter timelines were hit more often over the period, marking a 15% increase in comparison to the results for the same period in 2013. The number of views registered by the company amounted to 157 billion.
Following the release of the report, Twitter Inc.s stock declined by about 11% touching $37.79 per share yesterday, the weakest level since November 6th, the day of the companys IPO. However, Twitter Inc. erased earlier losses and added 4.64% to close at $42.62 per share yesterday. According to the information published on CNN Money, the 27 analysts offering 12-month price forecasts for Twitter Inc. have a median target of 52.00, with a high estimate of 72.00 and a low estimate of 32.00. The median estimate represents a +22.01% increase from the last price of 42.62.
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