Twitter's Ad Growth Flattering, Shares Fall 18 Percent
Everything is not well for Twitter. The micro-blogging service posted weaker-than-expected financial results for the first quarter on Tuesday, asking investors to reduce their expectations for the rest of the year.
As the company's stock fell more than 17 percent, the New York Stock Exchange halted trading at 3:27 p.m. Eastern time, about 20 minutes after the first tweet.
The information was tracked down prior to release by Selerity Inc., a New York firm that searches the Web for unreported financial news it can provide to clients. It began releasing the information in a series of tweets.
"Do people want to leave what they are doing on Twitter and do something else like buy something?" said Debra Aho Williamson, an analyst at the research firm eMarketer. "Direct-response advertisers haven't figured out the best way to use Twitter, and Twitter hasn't figured out the best way to market to them."
The company lost $162.4 million, compared with a loss of $132.4 million in the year-earlier quarter. Revenue jumped to $435.9 million from $250.5 million, but still fell far short of analysts' expectations of $463 million.
"The numbers were clearly weak," said analyst Brian Wieser at Pivotal Research Group.
Twitter has spent the last year adding features and redesigning old ones to add new users and retain old users. Twitter CEO Dick Costolo said the company is designing features to answer two fundamental questions: "Why should I use Twitter? And how do I use Twitter?"
