July 29--Twitter Inc. shares plunged to their lowest point in more than a year early Wednesday, a day after interim chief executive and co-founder Jack Dorsey bluntly told analysts the social media platform faces serious problems.
Company stocks were down about 13% trading at $31.90 by noon in New York after closing at $36.54 the day before.
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Dorsey surprised analysts Tuesday by criticizing the company for a lack of focus, unintuitive service and difficulties communicating the value of using Twitter.
Dorsey, who was reappointed chief executive a month ago after the resignation of Dick Costolo, added that Twitter's new products had failed to produce any "meaningful impact" on user growth.
It is "unacceptable and we're not happy about it," Dorsey said.
The comments came right after Twitter reported sound second-quarter earnings. At $502 million, revenue was up 61% compared with a year early and well above analyst estimates of $481 million.
Those numbers failed to satisfy investors Wednesday on the heels of Dorsey's candid remarks. Wall Street has long complained that Twitter is not adding users fast enough or introducing enough money-making tools.
Twitter's average monthly active users, a key measurement of growth, totaled 304 million core users, up just 2 million from the first quarter.
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Anthony Noto, Twitter's chief financial officer, said during Tuesday's call with analysts that the company does not expect any meaningful growth in the near term.
"We have not yet reached the cohort of users known as the mass market," Noto said. "Non-users continue to ask: Why should I use Twitter?"
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