Twitter Inc (NYSE:TWTR) reported a disappointing third quarter earnings on Tuesday, which did not meet the street’s estimate for user growth. Following the disappointing earnings report, Twitter Inc (NYSE:TWTR) stock fell by more than 9% in after hours on Tuesday. Fox Business News’s Jo Ling Kent talked on Fox Business about the investor’s concerns over Twitter’s user growth.
Twitter Inc (NYSE:TWTR) reported a 284 million Average MAU in the third quarter, which was 13 million more than the second quarter Average MAU. This accounts for just 4.8% user growth in the quarter, which did not meet the street’s expectations. Twitter’s inability to meet the user growth expectations shows that Twitter needs flagship events like world cup to boost its user base.
Kent reported that Twitter Inc (NYSE:TWTR) has disappointed many investors by a weak user growth in third quarter.
“When it comes to Twitter, investors only care about one thing, that’s user growth. That’s where Twitter continues to disappoint. For the third quarter, Twitter said user growth rose just 4.8% from the second quarter. That missed estimates, then casted doubt over the company’s plans for growth in actual profits,” Kent reported.
Kent mentioned that Twitter Inc (NYSE:TWTR)’s share prices has hit a four months low in after hours. She added that the disappointing 3Q results drove at least 11 wall-street shops to cut their price target on the stock.
Amidst all negatives, Twitter Inc (NYSE:TWTR) managed to generate impressive revenues around $361 million, which was 114% up year-over-year. Kent reported that the major worrying factor for the company is the increasing losses. Twitter Inc (NYSE:TWTR) reported a loss of $175.4 million, which was around $64.6 million in 3Q 2013.
Many Wall street analysts’ aren’t keeping high hopes on Twitter Inc (NYSE:TWTR), in comparison with its arch rival Facebook Inc (NASDAQ:FB). They feels that Twitter’s platform don’t engage younger generation as the Facebook and Instagram does, which is very critical to achieve substantial MAU growth and turn up profits.
Major worrying factor for a company like Twitter Inc (NYSE:TWTR) is that the company is yet to turn up profits, since it went public almost a year ago. Even though the company shares are up by more than 70% since its IPO, increasing losses concern the investors a lot.
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