Twitter shares plummeted on Tuesday after its disappointing financial results were published early – on Twitter.
The company had been expected to release its latest quarterly earnings figures after the stock markets close at 4pm. But after they were published early by financial news service Selerity the company’s shares were briefly suspended. The shares plummeted 20% when trading resumed.
Selerity, the finance company that shared the results early on Twitter, said that they neither hacked into emails nor received a leaked press release.
Today’s $TWTR earnings release was sourced from Twitter’s Investor Relations website https://t.co/QD6138euja. No leak. No hack.
— Selerity (@Selerity) April 28, 2015
They said they had simply used the company’s investor relations website, where Twitter had posted a press release with the headline “Twitter Reports First Quarter 2015 Results; Lowers Full-Year 2015 Expectations.” Twitter itself did the rest. Twitter is investigating.
We are investigating the source of the leak. (2/2)
— TwitterIR (@TwitterIR) April 28, 2015
Wall Street investors have long been concerned about growth at Twitter but this time it was disappointing revenue growth that sent the company’s share price plummeting. The number of monthly active users of the microblogging site climbed to 302 million by the end of March, up 18% compared to the same period last year, Twitter said. The company added just 14 million more users over last quarter’s 288 million - a bump that represents less than a quarter of the 63.1 million tweeters who follow Justin Bieber.
Slowing revenue growth surprised analysts. Twitter announced revenues had risen 74% to $436m, missing analysts’ expectations of $456.2m. In the prematurely released statement, Dick Costolo, Twitter’s CEO, said: “Revenue growth fell slightly short of our expectations due to lower-than-expected contributions from some of our newer direct response products.”
“It is still early days for these products, and we have a strong pipeline that we believe will drive increased value for direct response advertisers in the future,” Costolo said. “We remain confident in our strategy and in Twitter’s long-term opportunity, and our focus remains on creating sustainable shareholder value by executing against our three priorities: strengthening the core, reducing barriers to consumption and delivering new apps and services.”
Twitter has revamped its format and launched new services including the live-streaming video service Periscope to attract new users. Anthony Noto, Twitter’s CFO, said the company was very happy with Periscope. “We’ve seen tremendous early growth on Periscope,” he told investors. “In the first 10 days alone, more than one million people signed into the app.”
But the stock continued to fall in after hours trading on the news that the microblogging site slashed guidance for the coming quarter, saying that its direct response products – which help it target advertisements – had underperformed and were likely to keep underperforming throughout the year. Costolo said the company was trying to attract advertisers by agreeing to strict conditions. “It’s great value for advertisers, lower value for us,” he said, but added that he thought the decision was an acceptable short-term sacrifice.
The company also acquired marketer TellApart, formerly a major partner of Facebook’s on that company’s ad exchange, FBX. The predictive analytics firm helps to generate custom advertisements and will tailor Twitter users’ ads to match up more closely with those users’ behavior online.
TellApart is backed by Twitter’s CEO, Dick Costolo, who invested in the company’s $4.8m series A round of funding. “We’re not breaking out TellApart in our guidance from the standpoint that it’s not material,” Costolo said when asked about the specific financials for TellApart. He expects the deal to close on 1 June.
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