Twitter Stock Plunges After Monthly User Drop
Twitter shares have taken a beating after the social media company announced its daily monthly users had dropped and will probably continue to drop as it continues to remove fake accounts.
The company’s shares plummeted 20 per cent to US$34.12, the largest single-day drop in more than four years. However, its stock is still up at 42 per cent for the financial year.
The announcement comes with its second quarter financial results showing an increase in revenue by 24 per cent at US$711m compared to the prior year.
Its average monthly users dropped from 336 million to 335 million from the first quarter of this year.
Non-GAAP net income grew US$134m from US$56m in the prior year, GAAP net income came in at US$100m compared to a net loss of US$116m in the prior year.
Its adjusted EBITDA of US$265m compared to US$178m in the same period of the previous year, representing an adjusted EBITDA margin of 37 per cent.
Jack Dorsey CEO at Twitter says, “We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviours that distort and distract from the public conversation.
“These efforts contributed to healthy year-over-year daily active usage growth of 11 per cent and demonstrate why we’re investing in the long-term health of Twitter.”
Earlier this month Twitter removed close to 70 million fake accounts which caused its shares to drop 9 per cent.
Twitter is the second social media giant to take a hit on the stock market after Facebook had the biggest drop in US history of 19 per cent after it told investors growth was slowing.
Both Twitter and Facebook have been under the public eye as major events like the Cambridge Analytica scandal and the GDPR are making users be more conscious of what companies do with their data.