Twitter shares fell by 17%

The second quarter was unsuccessful not only for Facebook: Twitter on Friday reported to reduce the number of users by 1 million, predicting an even greater fall in the near future. Twitter explains: a similar outflow of subscribers is a consequence of the fight against spam, fake accounts and the aggressive rhetoric of some users. The market reacted to the company's quarterly report negatively - Twitter shares fell by more than 17%.

Details

• According to the results of the second quarter, the number of social networks decreased from 336 million to 335 million. Explaining this reduction in the audience of the service with reinforced measures to “clean” the platform from unwanted users and tightening European legislation in the field of protection, the social network made it clear that she intends to continue to act in the same way, considering this the key to long -term growth in the future. According to CEO, Jack Dorsie, a priority now is a decrease in the volume of insults in the social network.
• Weekly, using the artificial intelligence algorithms, Twitter finds more than 9 million potentially malicious accounts. The company claims that most of the removable accounts are either inactive or discovered even before active users notice them.
• Analysts fear that social networks have exhausted opportunities for growth. “Despite the fact that the most popular user of the platform is [US President Donald] Trump, in recent years the work of the social network has not improved much,” said the analyst from the Macquarie Securities Benjamin Skakter. “We simply do not see grocery innovations affect Twitter's ability to attract new users.”
• The fall in the shares was not even stopped by the fact that the company ends the third quarter in a row with net profit. It was thanks to this that earlier this year Twitter has risen by almost 80%. However, the forecast for the third quarter that the company gave was lower than the expectations of analysts - only $ 235 million instead of the expected $ 268 million.

Context

• At the main auction in New York, the Facebook capitalization on Thursday collapsed by almost 20%-up to $ 504 billion. Thus, a company has been checked by more than $ 120 billion during the day. This is a day of day falling in the history of the American stock market. The previous one - $ 90 billion of the fall per day - belonged to Intel, but this happened back in September 2000, when the bubble of dotcomes burst.
• One of the main reasons for the disappointment of investors was a decrease in Facebook profitability. At the end of last year, its profitability was about 57%, now - 44%, and by the end of the year it can decrease to about 35%.

Liana Faizova