A reality check for Twitter

Instant analysis of the social media company’s first quarterly report


Twitter’s first-ever quarterly report as a public company can be summed up in a lot less than 140 characters: meh. The popular social networking service continues to lose money, and sales, while up significantly from the same period last year, are expected to slow over the next three months. User growth also appears to be running out of steam, which is not good for a company that relies mainly on amassing eyeballs for advertisers. That all conspired to send Twitter’s high-flying stock price down by about 10 per cent in after hours trading Wednesday. The company’s shares, which traded at $65.97 on the New York Stock Exchange before the earnings were released, had more than doubled from their IPO price of $26 back in November.

While some were hoping Twitter would escape the social media curse— a much-hyped IPO followed by a financial performance that fails to live up to lofty expectations—it would appear Twitter still has some work to do before all those tweets can successfully be turned into profits.

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A reality check for Twitter

  1. Twitter will be shut down within 5 years. Short sell that sucker while you still can.

  2. IPOs are overrated, more than 2/3rds of them trade lower in 1, 2 or 3 years out of IPO day.

    There is a reason the owners sell, and most likely they themselves believe the company has maxed out in value. Like any tech company, they have short life cycles.

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