Twitter Shares Fall Further

Twitter shares fell over 10% after the fourth quarter revenues have disappointed. Growth in sales has fallen for tenth quarter in a row to $717 million. The net loss was $167 million, which stands for 23 cents per share. Without certain expenses, Forbes reports, the company would have earned close to $120 million.

 

In comparison to Facebook, Twitter monetizes its users at 50 percent the rate. Meanwhile, monthly active user base has grown to 319 million, representing 4% increase. Last quarter, two million new users were added. Twitter also announced first quarter expectations. The earnings before taxes are expected to fall between $75 million and $95 million, which is far less than $190 million expected previously by the analysts covering the company.

 

According to Twitter’s Chief Operating Officer, Anthony Noto, growth in revenues will lag. One reason is increasing competition for advertising dollars, the other is related to de-emphasis of certain products.

 

“We’re focusing our investments on revenue products that strengthen our unique value proposition, especially in live and video,” claimed Noto. He added that positive feedback has been received from advertising partners.

 

In comparison to Facebook, Twitter is losing steam when it comes to attracting a larger user base. For instance, Facebook-owned Instagram has 600 million monthly users. And when users were asked which social media platform they’d choose if they had only one choice, two-thirds said they would choose Facebook, while only six percent would opt for Twitter.

 

Back in 2014, Twitter shares were trading close to $70, now the price has fallen under $16. After a new social media IPO came from Snapchat, analysts are already comparing the latter company to Twitter rather than Facebook. Presently, Snapchat’s market cap exceeds $30 billion, while Twitter’s is around 40 percent of it. On the other side, the market values Facebook is close to $400 billion.