Twitter released its financial statement April 29, showing a doubling of revenues and a loss below Wall Street expectations.
Despite the fairly upbeat report, Twitter’s stock got hammered, dropping 10 percent in the after-market hitting a new low.
Part of the micro-blogger's problem stems from a comparison to social media darling Facebook, which boasts five times the number of users than Twitter.
While Facebook’s Mark Zuckerberg embarks on spending sprees to acquire important pieces to his empire like Instagram ($1B in 2012), Oculus ($2B for virtual reality outfit), WhatsApp ($16B for mobile messaging services company) and Sheryl Sandberg, Google star and former Treasury Secretary Larry Summers chief of staff who joined two years ago, Twitter plods along. There’s a growing fear that Twitter’s future is that of a niche business favored by reporters and celebs.
As a public company, Twitter should start acting like one. It’s first-quarter financial release treated shareholders to a one-paragraph comment on operations by CEO Dick Costolo.
He assured stockholders that things are going well and the integration of MoPub is going according to plan. Based on Twitter’s tumbling stock price on April 29, shareholders didn’t swallow that line. George Bush I may have scoffed at that “vision thing,” but Twitter needs to be out front about where it plans to go.
As for Wall Street, Twitter, which has more than $2.2B in cash/short-term investments and only $103M in long-term debt/capital leases, should retain a savvy IR firm like Brunswick Group, Kekst, Sard Verbinnen Edelman or Weber Shandwick to pitch its financial strengths.
Twitter shares closed today at $39.07 (up 0.3 percent) nearer their $37.24 32-week low than $74.73 high.
Facebook’s stock closed at $61.15 (+2.3 percent) closer to its $72.59 high than the $22.67 low for the past year.