Holy Pharrell's hat: Twitter shares have fallen 11% after user growth missed expectations

Twitter posted first quarter results showing user growth rose to 5.8% in the first three months of the year. It's better than last quarter, but not enough for investors.

by Emma Haslett
Last Updated: 12 Jun 2014

Shares in Twitter dropped just over 11% in after-hours trading last night after it posted results showing growth in active users hit 5.8% in the first three months of the quarter, below analysts' expectations. Also, presumably, because at least half new Twitter users are parody accounts of objects or body parts owned by celebrities (Pharrell's hat, Anne Hathaway's nipples, Drake's knee).

So 255 million people now tweet every day, but that still equated to a loss of $132m (£78m), on revenues of $250m (ad revenues of $226m). Timeline views - ie the number of times people actually logged on and checked out their accounts - increased 15% to 157 billion.

User growth is clearly a worry to investors: for the past three quarters, that figure has actually been dropping. Last quarter, though, it was 3.8% - so at least 5.8% is higher. Shareholders clearly weren't convinced it was enough, though.

Does this mean we've reached peak Twitter? The company could certainly do worse than getting into the emerging markets race with rivals like Google and Facebook. The company deserves credit for finally figuring out a way to make some cash (although considering its size, unkinder shareholders might suggest $250m isn't an awful lot. Just under a dollar per user, in fact) - but it needs to find a way to increase its user base if it's ever going to increase those ad revenues.

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