Twitter shares plunge after user growth disappoints

Shares in Twitter plunged by around 14% after the social media company reported user growth that fell short of expectations.

Twitter released its third quarter report on Thursday alongside other household name tech companies including Apple, Google, Facebook and Amazon.

The San Francisco-based company said it saw just 1 million new monetisable daily active users in the third quarter, taking it to 187 million.

Analysts on Wall Street had expected the site to reach 195 million monetisable daily active users in the period, according to FactSet.  

The company grew 29% year-on-year in the metric. It is Twitter’s own audience measuring method, only counting logged-in users who are shown advertising.

The reaction to its announcement erased gains of 8% during the regular trading session earlier on Thursday. Shares opened on Friday morning on the New York Stock Exchange down 14.4%, to $44.73.

Twitter’s net income in the quarter fell by 22% year-on-year to $28.7 million.

But it was not all bad news. The return of events including live sports saw sales up 14%  in the quarter to $936 million, according to Refinitiv.

The site had seen soaring numbers of new users as lockdowns set in around the world in March, at the same time as other major online platforms such as Netflix and Amazon Prime.  

Twitter’s chief financial officer, Ned Segal, told analysts on Thursday: “We would all like to have that kind of surge [in users] all the time but it’s just not going to happen every quarter.”