Twitter Reports Weak Earnings and the Stock Is Crashing

&gt; “It calls into question why they didn’t see this coming,” said Victor Anthony, an analyst at Axiom Capital Management, who has a buy rating on Twitter’s stock. “I don’t think anyone ever questioned their ability to generate revenues.”<p>Hmm, I thought everybody did? I guess wall street really does have a clear view of this whole tech scene.

<a href="https:&#x2F;&#x2F;twitter.com&#x2F;Selerity&#x2F;status&#x2F;593136296236752896" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;Selerity&#x2F;status&#x2F;593136296236752896</a><p>&quot;Today’s $TWTR earnings release was sourced from Twitter’s Investor Relations website <a href="https:&#x2F;&#x2F;investor.twitterinc.com" rel="nofollow">https:&#x2F;&#x2F;investor.twitterinc.com</a> . No leak. No hack.&quot;<p>Looks like someone found a draft post. Yeesh.

Did anyone expect any different from Twitter? Their main platform needs significant improvement.<p>Biggest disadvantages for Twitter:<p>1) People are flocking to other social messaging apps, especially the mobile variants (Snapchat, Instagram, etc). I suspect because its coolness factor is waring off, because of rampant trolling, and poor discovery.<p>2) Most of Twitter advertising is useless, in large part due to poor data collection. I have yet to see any performance campaigns really kill it on the platform. Brands only advertise because they are easily misled by agencies.<p>Can anyone offer realistic suggestions to help improve the company&#x27;s outlook? Here are some random thoughts:<p>1) Trying to take a piece of the mobile ecosystem seems like a smart move, as they show genuine expertise. I liked their acquisition of MoPub and every developer seems to use Crashlytics. People seem to use Periscope and Vine often, as well. This could lead to a lucrative formula: Making apps easier to build with their tools, nudge developers to monetize through MoPub, and then take the plethora of learnings from the latest mobile craze and build an awesome new app.<p>2) They need to better monetize news, not just social interaction. How much content is written today because &quot;Person said X offensive statement on twitter&quot;? Twitter gets $0, despite the fact most news comes from them. Maybe try to attempt to be the Bloomberg Terminal for all news going forward? How about trying to beat Nielsen (16bn market cap) in actually monitoring sentiment? This obviously would take some ingenuity, but could be very rewarding. They seem to be trying this strategy, with some of their recent acquisitions.<p>3) Find out what other countries want. There is still a huge untapped marked in the 3rd world. Twitter could expand there by offering new services.<p>4) Somehow disincentivize blowhards from going on Twitter too often.

I can understand why investment type people like y-axes that don&#x27;t start at zero - they&#x27;re usually interested in tiny changes a long way from zero. But for the general public to watch? If you didn&#x27;t already have an up to date feeling for the price of Twitter shares, then this whole report is meaningless without finding the -$9 and doing the calculation yourself. She even points out that it&#x27;s now $40 but not what it was before. Are most viewers really that tuned into the market that they know the prices of things before they&#x27;re in the news?<p>Turns out this is only something like 20% drop making it the same as February this year! Nothing spectacular at all. It endured a similar crash in October last year and took a few months to recover.<p><a href="https:&#x2F;&#x2F;www.google.com&#x2F;webhp?sourceid=chrome-instant&amp;ion=1&amp;espv=2&amp;ie=UTF-8#q=twitter%20share%20price%20history" rel="nofollow">https:&#x2F;&#x2F;www.google.com&#x2F;webhp?sourceid=chrome-instant&amp;ion=1&amp;e...</a>

My personal reason for using Twitter less is the degradation of the website. Using J to scroll down has always been buggy with image posts and often resets to the first post, but newest &#x27;feature&#x27; includes not being able to view threads inline. When clicking a tweet it will go to the details page (opening in a new tab doesn&#x27;t work) and when going back you have to scroll down possibly hundreds of tweets. When opening images inline (that still works in most cases) the page scrolls up a random amount, anywhere between 5 and 50 tweets it seems. Copying image URLs using right click also doesn&#x27;t work anymore when viewing an image (only from the tweet list can you copy it, then manually editing the URL to include &#x27;:large&#x27; works). And of course the ads, even though I don&#x27;t see them, the J key doesn&#x27;t skip them so I know they&#x27;re there.<p>Overall, the user experience becomes worse and worse. They said Twitter makes a good replacement for RSS feeds, but honestly I wish my Twitter feed was an RSS feed to be loaded in any reader I like.

Ya&#x27;ll need to chill out and look at a price chart of TWTR over time. This is very common run-of-the-mill volatility.<p>Source: <a href="http:&#x2F;&#x2F;stockcharts.com&#x2F;h-sc&#x2F;ui?s=TWTR&amp;p=W&amp;b=5&amp;g=0&amp;id=p87079254187" rel="nofollow">http:&#x2F;&#x2F;stockcharts.com&#x2F;h-sc&#x2F;ui?s=TWTR&amp;p=W&amp;b=5&amp;g=0&amp;id=p870792...</a>

&gt;Twitter cut full-year revenue guidance to $2.17 billion to $2.27 billion, from the previous range of $2.3 billion to $2.35 billion.<p>I find it astonishing that what is basically a short message broadcast service can generate billions of dollars of revenue. So I think that they have to be doing something very right. Perhaps everyone is anticipating the inevitable next hot thing a little bit too hard.

Random question: How do I stop videos from auto starting on Bloomberg? I&#x27;m running Safari with no Flash, and have Ad-block on. Video doesn&#x27;t start, but audio does.<p>Super Annoying.

This probably shouldn&#x27;t be surprising news but it has some shock value. Twitter is very close to what some would consider a model civic communications platform. I remember hearing one tech pundit refer to it as &quot;citizen&#x27;s band radio for the 21st century.&quot; The idea that such an effective tool needs to generate revenue a la Facebook seems odd, even though I understand that it operates like any other business entity.

I bet the mood there is REALLY sombre.<p>Leak or not, missing earnings is a career limiting move for management. And it was a HUGE market reaction for an earnings miss, kinda implies that the market isn&#x27;t convinced by the fundamentals of the stock.<p>Ouch!

Irony is a black box trading system listening to the firehose and picking up that nugget.

The reaction makes a lot of sense. Their revenue is miniscule compared to a $34 billion market cap. That market cap can only be justified by massive future revenue growth. The results are indicative that the future revenue growth might not be as massive as people thought it was.

Twitter is currently valued at &gt;10x revenue, is unprofitable and future revenue projections are being dialed back. The hype has worn off. It&#x27;s going to get real ugly real fast unless they can post some decent results real fast.

Meh, I don&#x27;t get it.<p>They&#x27;re making money, they grew to 18% more active users (that sounds like a lot), what seems to be the problem?

I think the writing is on the wall for Twitter. The younger generations are increasingly flocking to snapchat, yik yak, and similar apps. I never hear of anyone using it anymore(college student here). I would have stopped facebook a while back as well if I didn&#x27;t use OAuth for damn near everything

&quot;Crashing&quot; is a bit inaccurate. It dropped and has now stabilized at a lower price. Crashing would imply that it&#x27;s continuing downwards, which it isn&#x27;t.

As a developer, how accurate do you think Twitter&#x27;s user numbers really are? There are a ton of fake accounts out there. Some are semi-legit (for development), but there are millions of followers available for purchase and Twitter has only removed a fraction compared to Facebook from my anecdotal evidence. What do you think?

Twitter is just a sign of what&#x27;s to come for a lot of new tech companies. The street wants profit. Once you go public the whole cool startup party ends (unless you can be a cool startup AND hit your profit numbers).<p>It&#x27;s time to be a real business or pay the price of being an overvalued pile of stinking financial junk.

I never understood Twitter management. Just accepting small and medium sized companies to consume their firehose and charge for that will be enough to significantly increase their earnings. This was the Google AdWords breakthrough.

I remember that CNN was all Twitter all the time a few years ago. I haven&#x27;t watched until today for Baltimore info. No mention of Twitter in the last six hours of watching.

I see boomers yelling &#x27;the bubble is bursting&#x27;.

While I understand Twitter from a technical perspective, I have never understood why a large number of people use it. The value proposition for an average person is effectively zero. It&#x27;s great for businesses and celebrities, but one-sided value propositions tend to not work out long term. We are now starting to see that inevitable result play out. You can only defy gravity for so long.

This explains the deluge of dubious advertising at the top of twitter pages.

this is my theory that the current economic model we have of dot com stocks is very much flawed, grossly overvaluing future potential revenues vs. current revenues. This argument never makes sense to me, unless you are investing in infrastructures like oil rigs or telecom grids that have a very sure and quantifiable return on investment, this is a mystery with a lot of dot com companies, especially for those that fail to demonstrate ability to earn.<p>I think a market correction is long overdue, I believe that after this year, capitals will be tougher to come across, companies that didn&#x27;t really innovate but instead captured markets by burning cash won&#x27;t be able to sustain this level come rainy season when capital market dries up for these firms.