Twitter shares plummeted 19 per cent, the social media company's biggest fall in more than a year, after its third-quarter report to shareholders reflected lower than expected advertising revenue amid privacy concerns and product issues.
The company's third-quarter sales increased 8.6 per cent to $823.7m, short of a predicted $876m, which the company attributed to "a number of headwinds," including a drop in advertising in July and August. Shares dropped to $34.44 following news to shareholders of the company's disappointing quarter.
Its shareholder letter also cited "bugs" affecting its targeted ad capabilities that "share data with measurement and ad partners", the company said. Ad engagements increased 23 per cent, but the cost per engagement dropped 12 per cent.
Those "bugs" include the company's collection of device data from users that it wasn't supposed to be targeting, then using that data for targeted ads. Twitter's Chief Financial Officer Ned Segal said that the product's settings were "not working as expected" for that feature.
The company stopped collecting that user information in August and shut down the feature entirely, which the company believes hurt its overall ad picture.
User data also was still being collected even after they believe they had opted out of a feature that asked them if Twitter could use device-specific settings to personalise their timeline.
Addressing third-quarter results on CNBC, Mr Segal said the company feels "really good about the progress" it's making but intends to hold itself accountable for user privacy issues and other product concerns.
The company said it added 6 million new daily active users in the third quarter, up to 145 million, marking a 17 per cent increase from the previous year and a 4 per cent jump from the second quarter.
Among Twitter's recent product updates include an ability for users to follow topics, not just individual accounts, an experiment it will continue into 2020 in an effort to retain its millions of users and attract new ones while climbing back from revenue shortfalls
