Twitter has reached one milestone it won’t want to crow about: shares have fallen below the $26 (£16.50) they floated at back in November 2013. It’s certainly been a miserable summer for the social network, having lost CEO Dick Costolo amid a rash of other departures and dismal user growth.
The messaging site’s shares dropped 5.83% in New York yesterday, and have since slipped another 0.96% to $25.75 in after-hours trading. It’s now worth $17.4bn, which wouldn’t be half bad had it not soared as high as $49bn soon after its IPO.
Credit: Yahoo Finance
To be fair to Twitter, shares around the world have taken a beating, with the S&P 500 falling 2.11% yesterday as economic news from China worsened. But it’s been having an especially torrid time of late.
Costolo fell on his sword in June, with a chirpy farewell that wasn’t enough to hide signs there was worse was to come. And sure enough three weeks ago it reported user growth had risen less than 1% in the second quarter of this year.
Interim CEO and co-founder Jack Dorsey warned it would take some time before that slowdown could be reversed. All the while Mark Zuckerberg’s empire of apps – Facebook, Whatsapp, Instagram - have been adding users like there’s no tomorrow.
The uncertainty over whether Dorsey, who also runs payments company Square, is in the running to replace Costolo permanently isn’t helping either. What Twitter desperately needs is stability at the top so it can get on with the increasingly urgent task of making tweeting more appealing to people who aren’t journalists and celebrities.
In the meantime, the rumours continue to grow that higher-flying companies are eyeing Twitter from their perches. And with its market cap continuing to plummet, it’s looking like an increasingly digestible target for a Facebook or Google to swoop on. That is if any of them think 140 characters can be rescued from MySpace-esque oblivion.