Investors traded the stock down 20%.
The speed at which Twitter’s leaked results moved across Twitter shows the social network’s strength. It is a powerful platform, where real-time news can spread like wildfire.
But the content of the leak shows Twitter’s challenge. Twitter’s first quarter was not stellar. The company missed analysts expectations on revenue and revised its guidance downward for the rest of the year. Investors traded the stock down by 4% before trading was halted. When trading resumed, shares were down more than 20%.
Later in the day, the Nasdaq stock exchange, the host of Twitter’s investor relations page through Shareholder.com, accepted blame for the early disclosure of the earnings report, according to the Wall Street Journal. “Our Shareholder.com inadvertently made an early version of Twitter’s earnings release publicly accessible,” said Joe Christinat, a Nasdaq spokesman. “We’re investigating the root cause. The issue did not impact other shareholder.com clients.”
What you need to know: Twitter reported 302 million monthly active users in the first quarter, in line with estimates and an 18% increase over last year. The company’s biggest weakness, in the eyes of investors, is that it isn’t adding new users as fast as they would like. For the past year, CEO Dick Costolo has been touting product improvements meant to increase engagement and lure lapsed users back to the service, but the results don’t show a huge change.
The big number: $436 million. The company’s quarterly revenue, an increase of 74% over last year, was lower than analysts expectations of $457 million and below Twitter’s guidance of $440 million to $450 million. The company continues to increase revenue significantly, but Wall Street is focused on profitability and the company’s inability to beat expectations. Twitter lowered its guidance for annual revenue from $2.3 billion to $2.170 – $2.2 billion.
What you might have missed: Twitter acquired TellApart, an advertising tech company which helps retailers and commerce sites target shoppers on their mobile phones. The move shows Twitter’s desire to “close the gap” between a user seeing a Twitter ad and making a purchase. If Twitter can prove its ads are responsible for driving sales, it can charge more for those ads. TellApart had raised $17 million in venture capital. TellApart’s investors include Twitter CEO Dick Costolo.
(This story was updated with additional information about the source of the leaked earnings release)