Twitter slow growth wipes out ten percent of its value
Social media network Twitter has reported its slowest pace of user growth, wiping out more than 10 percent of its value on Wednesday.
The company posted better-than-expected quarterly revenue of $243 million (around 179 million euros) in its first results as a public company, but investors focused on Twitter’s slow user growth and a decline in user engagement.
Some analysts warned that its valuation looked increasingly bloated.
Scott Kessler, Head of Technology Equity Research, S&P Capital IQ, explained: “Twitter is not the first, the second, or the third but the forth largest global social network based in the US behind Facebook, Google+ and behind LinkedIn and there was a reason for that because it is just not as accessible or easy to use as maybe other platforms are,” explained Scott Kessler, Head of Technology Equity Research, S&P Capital IQ.
“And then I think what’s really important is the second item, which is it costs a lot of money to invest and expand and sustain growth,” Kesser added.
To increase revenues, Twitter has invested heavily in its ad targeting capabilities, while advertisers have shown willing to pay more for better-targeted ads.
The company posted better-than-expected quarterly revenue of $243 million (around 179 million euros) in its first results as a public company, but investors focused on Twitter’s slow user growth and a decline in user engagement.
Some analysts warned that its valuation looked increasingly bloated.
Scott Kessler, Head of Technology Equity Research, S&P Capital IQ, explained: “Twitter is not the first, the second, or the third but the forth largest global social network based in the US behind Facebook, Google+ and behind LinkedIn and there was a reason for that because it is just not as accessible or easy to use as maybe other platforms are,” explained Scott Kessler, Head of Technology Equity Research, S&P Capital IQ.
“And then I think what’s really important is the second item, which is it costs a lot of money to invest and expand and sustain growth,” Kesser added.
To increase revenues, Twitter has invested heavily in its ad targeting capabilities, while advertisers have shown willing to pay more for better-targeted ads.