Business Essentials for Professionals


Twitter Share Price Rises As The Social Media Platform Posts Strong User Growth

Twitter Share Price Rises As The Social Media Platform Posts Strong User Growth
Even though the revenues of Twitter fell for the first time since the company's market debut, the microblogging service reported better-than-expected user growth in the first quarter which resulted in a rise in the shares of the company.
Questions about Chief Executive Jack Dorsey's leadership were raised and speculation the social media platform may be bought by a bigger company was generated as the company went through several quarters of stalled user growth and hence the acceleration of the company has surprised many in the market.
A key performance indicator for social networking services typically calculated by taking the number of users who have logged in and logged out during the 30-day period is the monthly active users and in this aspect, Twitter reported yearly growth of 6 percent as the numbers reached 328 million.
Twitter added 9 million monthly users on a quarterly basis.                      
User engagement has been boosted by bringing in changes to Twitter's timeline function in the past year to list content by themes instead of in chronological order, Dorsey said.
"We want to get to a place where we're the first place they hear of something," he said on a conference call with analysts.
According to market research firm FactSet StreetAccount, analysts on average had expected 321.3 million monthly active users.
Compared to a year ago, in the first quarter, Twitter's daily active users also rose 14 percent. The number of total daily active users is not disclosed by Twitter.
In what was its first drop since its initial public offering, the company’s revenue, however, fell 7.8 percent to $548.3 million in the first quarter.
From $79.7 million, or 12 cents per share, a year earlier, net loss narrowed to $61.6 million, or 9 cents per share, in the quarter ended March 31.
The company earned 11 cents per share, beating the estimate of 1 cent per share excluding items.
According to market research firm FactSet StreetAccount, while coming in above the average analyst estimate of $442.7 million, Twitter's advertising revenue fell 11 percent to $474 million in the quarter.
"I think that (U.S. President Donald) Trump drives a lot of awareness about Twitter among people who otherwise wouldn't be paying attention," said Michael Pachter, managing director at Wedbush Securities.
"But again, one quarter isn’t a trend, so let’s see if it’s sustainable."
With more than 800 hours of live video across more than 450 events, livestreaming, one of Twitter's biggest pushes since last year, also jumped in the first quarter.
The fourth quarter was the first full quarter of live content to be streamed on the social media platform and Twitter said the content reached 45 million unique users, up 31 percent from the fourth quarter.
Twitter said that among the live streaming hours, 51 percent were sports, 35 percent were news and politics, and 14 percent were entertainment.
Twitter shares were up 11 percent at $16.23.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc