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Twitter shares drop by more than 11 per cent


Slow user growth affecting profits, despite $250 million revenue in Q1 2014

April 30, 2014 3:42 by

San Francisco-based Twitter disappointed investors, as shares dropped by more than 11 per cent during after-hours trading yesterday (Tuesday, April 29).

The social networking site, which has a substantial user base in the UAE, reported higher-than-expected revenue of $250 million in the first quarter of 2014, but a net loss of $132m. The number of new users reached 14 million in Q1, bringing the total number of users to 225 million. However, this is a far cry from the 1.3 billion users on Facebook or WhatsApp’s 500 million.

In December last year, stocks reached their peak and the company was poised to match Facebook’s figures. However, user growth has been slower than expected since then. Shares were reported to have fallen by more than 40 per cent since the start of 2014. To investors, new users and engagement are primary to accumulating profits.

Twitter recently changed its interface so that users can follow their desired conversations only, bypassing irrelevant tweets, and this may have affected the levels of user engagement negatively. According to a report by Reuters, Twitter’s CEO, Dick Costolo, says the design will be tweaked for better results.


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