Twitter’s shares fell nearly 20 per cent in an hour on Tuesday after its first quarter results were leaked early by an unknown financial analytics company, who used the social media service to announce losses 23 per cent higher than in the same period last year.
An announcement had been planned for after 4pm, when markets closed. Instead, a company called Selerity tweeted out an early release they had found on the Twitter’s investor relations site just after 3pm, prompting a plunge in share price.
Any kind of timing would not have disguised Twitter’s weakest quarterly revenue growth since it became a publically traded company. Revenue growth of 74 per cent to $425.9 million was less than Twitter’s and analyst’s expectation, prompting a review of forecasts for the current quarter. Twitter has still never made a profit.
While it has more users than ever - up 14 million on the last three months of 2014 to 30 million – investors are concerned about its advertising business, which has so far doubled its revenue each quarter in the last year. Twitter’s management have said that adverts that resemble tweets, known as ‘direct response ads’, had not performed as well as expected – despite similar adverts doing very well on rival sites like Facebooks.
Continuing expansion, adding staff, offices and data centres, has added to losses of $162 million, 23 per cent greater than in the same period last year.
Selerity detected the results early by following an updated link on Twitter’s investor relations web page and to the results document.
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