Apr. 29 - Investors were disheartened by Twitters results- focusing on user growth and engagement, despite better-than-expected earnings and revenues. Bobbi Rebell reports.
Twitter's second time at bat with earnings after going public- another strike out in a key metric. The stock slammed- even though it did not lose money- as had been expected- and its revenue came in better than forecasts. The problem- its ability to attract new users- and keep them. User growth disappointed Wall Street - growing to just 255 million monthly users globally. And they were also less engaged than forecasts. That's measured by what Twitter calls timeline views- the number of times users refresh their twitter feeds. Wedbush Securities Shyam Patil is keeping a neutral rating on Twitter stock: SOUNDBITE: SHYAM PATIL, ANALYST, WEDBUSH SECURITIES (ENGLISH) SAYING: "I think the stock is probably going to be under pressure in the near term. It seems like the entire focus for investors was around user growth and engagement. Both those metrics came in light. You know they have the lock up expiring I think at the end of last week. Both of these events are going to create some near term pressure on Twitter." Twitter is also making less money in advertising revenue - $1.44 for every 1,000 timeline views, down from $1.49 in the previous quarter. Twitter has been trying to attract new users by experimenting with new features- like importing contacts, so new users can follow people they know. And they have been trying to get advertising dollars from the television industry- saying users who tweet while watching TV are more likely to stay tuned to ads and buy things. But a recent report in the Financial Times quoted an NBC executive casting doubt on the strategy's effectiveness. Patil though- still sees potential there: SOUNDBITE: SHYAM PATIL, ANALYST, WEDBUSH SECURITIES (ENGLISH) SAYING: "I think it's very difficult to measure all of mobile and all of online so it's very likely that NBC didn't properly measure Twitter's impact. You know from our own research, we found that Twitter actually is driving incremental audience and one of the stronger use cases we have heard from agencies and audiences is around live events and the second screen experience. So the feedback we have gotten has actually been positive on that front for Twitter." But until they can convince Wall Street of that- he believes investors will continue to disengage from Twitter stock.