Twitter stock hits all time low following Q1 report

Despite excellent quarter, investors still concerned about user growth numbers

Financial trends and news by Steven Loeb
April 30, 2014
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Despite having what was, in most ways, a stellar first quarter earnings report on Tuesday, Twitter's stock was hit hard. So hard, in fact, that it fell to an all time low in after hours trading. Yikes!

After gaining 4.64%, or $1.79 cents, in regular trading to finish at $42.62 a share, the company gave all that back, and much more. It fell 11.24%, or $4.79, all the way down to $37.83.

The lowest that Twitter's stock has ever closed regular trading lower was in November, when it went down to $39.06.

This continues a worrying trend for the company, which has seen its stock lose a big chunk of value since it released its fourth quarter, and full year, earnings report back in February. At that time it was trading at $65.97 a share, roughly $23 more than it is now. 

Both times the stock was rocked by investors who were unhappy with Twitter's user growth numbers.

In the fourth quarter of 2013, Twitter only saw its average monthly active users (MAUs) grow 30% year to year to 241 million, while mobile MAUs increased 37% to 184 million. And those numbers were even worse in this past quarter: MAUs grew only 25% year to year, to reach 255 million.

The news was not all bad: the company actually added more users during this quarter, 14 million, than it had in the previous quarter, when it added 9 million. 

That was enough to make Dick Costolo to say, in a conference call after the earnings release, that he was happy with the progress. But that was not enough for investors, as analysts had been expecting MAUs to hit at least 257 million.

The sad thing is that Twitter had a great quarter in every other way, easily beating Wall Street expectations and more than doubling its revenue year to year.

The company posted quarterly revenue of $250 million, up 119% from the same quarter last year, while analysts had been expecting quarterly revenue to be $241 million. Twitter reported non-GAAP EPS of $0.00, which beat expectations of a loss of 3 cents a share.

Almost all of Twitter's revenue came from advertising, which accounted for $226 million, a 125% year to year increase. Data licensing, and other revenue, came to $24 million, an increase of 76% year-over-year.

Excellent numbers or not, if the company cannot find a way to really spark those user numbers, though, its going to be tough to keep investors happy and interested in the long term.

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