wednesday, 29 april of 2015

A Tweet Sinks Twitter’s Stock

It was a tumultuous day for Twitter after an unexpected tweet about the company’s disappointing earnings report immediately clobbered Twitter’s stock, which ended up falling 18 percent by the end of Tuesday’s trading session. Investors were unhappy with Twitter’s revenue, which grew 74 percent in the quarter — less than the 97 percent growth seen in the fourth quarter and below the company’s own forecasts.

Twitter executives attributed the slowdown in growth to a transition to a new advertising model that priced certain ads based on the result, such as whether the viewer downloaded an app, instead of whether the person simply clicked on it. But analysts said the revenue figures suggested that Twitter might be less useful than competitors for what are called direct-response ads. “Direct-response advertisers haven’t figured out the best way to use Twitter, and Twitter hasn’t figured out the best way to market to them,” said Debra Aho Williamson, an analyst at the research firm eMarketer.

Traders certainly found the real-time network useful on Tuesday after Selerity, a financial analytics firm, tweeted what looked to be an early release of Twitter’s earnings report, nearly an hour before Twitter was scheduled make it public. Six seconds later, Selerity says, shares of Twitter plunged. The New York Stock Exchange briefly halted trading in Twitter’s shares as the company tried to find the source of the leak. Later in the day, Nasdaq, which manages the information on Twitter’s investor relations webpage, said it had inadvertently made an early version of the earnings report available.

(Published by The New York Times – April 28, 2015)

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