Twitter an online social network service provider that enables users to send ‘TWEETS’ a short message of not more than 140 characters. Twitter was created by Biz Stone, Evan William, Jack Dorsey and Noah Glass in March 2006 and was launched in July 2006. Twitter gained rapid popularity over 100 million users posting 300 million tweets per day in 2012.
November 6 2013, the Initial Public Offering IPO of twitter in the New York Stock Market NYSE had been hyped by the media with investors ready to pounce at the opportunity at $26 per share. The following day, twitter opened for trading on New York Stock Exchange NYSE at £45.10 hitting a high of £50.09 and a low of £44.90. By the closing bell 118 million shares were sold.
Bullish investors continued to invest continued to invest in twitter shares. In December 2013 share price went as high $73.31 at 76.35%. Twitter released its first quarter earnings after the closing bell of February 5 2014. Its earnings and revenue estimates was a high but it also reported a in user growth.
In February 6 2014, the share price went down to $50.03 taking down by 24.16%. In April 2014, twitter reported earnings of zero percentage per share on revenue of $250 million. Its users increased by 14 million compared to the previous year quarter of 19 million, this resulted to a fall in share price to $38.87.
At the second quarter of 2014, the company reported 2 cents per share in earnings on revenue of $312 million beating the forecast of analysts which predicted a negative 1 percent per share on revenue of $282.44 million. Twitter shares also plunged to $46.30 on July 30 2014.
Analysts estimated in the second half of the year 1 cent per share of $351 million; however twitter earnings was 1 cent per share of $361 million. In the fourth quarter twitter revenue guidance fell in the range of $440 to $450 million. However the share price went down by 9.84% to $43.78 in October 2014.
Twitter share price went up on Feb 6 2015 by 16.35% to $48.01, its earnings was 12 cents per share on revenue of $479 million. On April 28 2015, twitter was scheduled to release a report at the end of the closing bell, there had bullishness from all quarters. Twitters report was expected to earn 4 cent per share on revenue of $456million. At 3:18 pm twitter share price went down by more than 2% below the closing price of the previous closing price. Media reports explained how a firm called Selerity a financial intelligence used twitter’s platform to release their earnings report an hour early. The share price soared down by 6.4% before trading halted at 3:27pm . At 3:47pm, trading resumed shares went down to $40.45. The stocks still went as low as $38.38 but closed at $42.27.
On June 11 2015, twitter announced the retirement of Chief Executive Officer CEO Dick Costolo for July 1 that year after coming into criticism about failing to provide any pre announcement guidance. He was replaced by Jack Dorsey.
The user growth on twitter has been very sluggish and is the root cause of stocks falling. This problem caught investors attention by the company’s first earning report. Twitter price was lowered from $18 to $16 per share by Morgan Stanley on April 7 2016.
Twitter struck a deal with the National Football League NFL to stream Thursday night games, Morgan Stanley analysts are focused on poor user growth, demonstrating how it lagged behind the rates of user growth established by Instagram and Snapchat.