Twitter Shares Tumble
San Francisco — The recent negativity shown toward many Internet companies hit Twitter hard Monday, as the social-media leader’s stock price fell to its lowest level ever ahead of its upcoming quarterly earnings report.
Shortly after trading began, Twitter shares fell more than 5 percent, to $14.87, hitting their lowest point since the company went public in November 2013. The losses added to Twitter’s stock-price downfall, which has shaved more than 67 percent off the company’s market value over the last year.
Twitter shares closed Monday at $14.90.
Monday’s decline initially was blamed by some on reports over the weekend that Twitter would soon implement a change to its timeline feed that would make posts appear in a non-chronological order, akin to what Facebook does with its news feed. Twitter users took to posting complaints about the possible end of the real-time, live tweet stream with the hashtag #RIPTwitter. The reaction led Twitter Chief Executive Jack Dorsey to tweet that Twitter was “still live,” but he didn’t deny that changes to Twitter’s timeline weren’t on the way.
“All of the chatter about the service changing has investors worried that change will drive people away,” said Michael Pachter, who covers Twitter for Wedbush Securities. “And that’s a problem for a company like Twitter that isn’t growing its user base much, if at all.”
When Twitter reported its third-quarter results, in October 2015, the company claimed 320 million monthly active users, or MAUs. That figure was up by 11 percent from the third quarter of 2014, but rose by only 4 million users from the second quarter of last year.
Twitter has also undergone a lot of upheaval in its executive ranks over the last year. Dorsey, who co-founded the company, came back as CEO on a permanent basis in October, and in late January, four executives who were responsible for Twitter’s engineering, product and media divisions left the company.
Analysts who cover Twitter said the latest backlash against the company has less to do with the company’s timeline policies and more to do with the general stock-market malaise since the start of the year.
“It’s the market dumping on tech stocks and no support for Twitter ahead of earnings this week,” said Michael Nathanson, of MoffettNathanson, referring to Twitter’s fourth-quarter earnings results, scheduled for after the close of trading on Wednesday. Analysts surveyed by Thomson Reuters estimate Twitter will earn 12 cents a share on $710 million in revenue for the quarter that ended in December. During the year-ago period, Twitter also earned 12 cents a share, on sales of $479 million.