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Twitter’s $132bn Q1 loss sends shares tumbling more than 11%

Published time: April 30, 2014 13:43
Reuters/Brendan McDermid

Reuters/Brendan McDermid

Shares in the social network Twitter have fallen 11.1 percent on market opening in New York on Wednesday after the company announced disappointing first quarter results. Decreasing user growth and deep net loss triggered a shareholder sell off.

The micro-blogging service posted a net loss of $132.4 million accrued from stock compensation costs. In comparison, the same period last year the company posted a $27 million loss , according to the company’s financial statement.

Even a sharp increase in advertising revenue didn’t help Twitter make a profit.

Company revenue more than doubled to $250 million, up from $114 million in the first quarter of 2013, which beat the company’s own forecast and analysts' expectations. Advertising generated $226 million with 80 percent coming from mobile.

"We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth," said Dick Costolo, the CEO of Twitter.

"We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than 1 billion iOS and Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising," Costolo concluded.

Twitter, which went public on the New York Stock Exchange last November, says it has 255 million average monthly active users (MAU) as of March 31, a 25 percent year-over-year increase. The MAU growth appears to be falling as at the end of the last quarter the number of the active blogs increased by 30 percent.

"They need to prove that they can be a very large-sized platform," the Economic Times quotes Arvind Bhatia, an analyst with investment firm Sterne Agee. "Can they get to 500, 600 million users worldwide? That's what they have yet to prove."

By comparison, Facebook has 1.28 billion users, and the professional networking service LinkedIn had 277 million users at the end of 2013. WhatsApp, the messaging app Facebook bought for $19bn, recently passed the 500 million user milestone.

Comments (10)

 

Netr Yahu 05.05.2014 14:49

Russia's finest propaganda minds at work here. Whats a million and a billion between friends?

I wonder if they work at the Russian treasury as well? Perhaps covering Vlad's personal accounts.

Just change the Bn to Mn and all is well in the world.

 

Bartek Ringwelski 04.05.2014 20:06

I think they mean trillions, not billions.

 

RedTickAlert 04.05.2014 16:26

You headline states billion not million - get a grip

View all comments (10)
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