Why Twitter Got Crushed Yesterday

Why Twitter Got Crushed Yesterday

Despite delivering a beat in its earnings report both in revenue and adjusted earnings per share, Twitter shares fell off a cliff yesterday, down by 24%. In this video from Friday's edition of Tech Teardown, Motley Fool tech and telecom analyst Evan Niu discusses Twitter and its biggest problems: user growth, and user engagement.

The investing narrative for Twitter bulls has been the idea that this company is growing extremely rapidly, and could potentially even catch Facebook one day in terms of the number of users it has and, therefore, the number of eyes advertisers could reach through the platform. But with only 9 million new monthly active users this quarter, bumping the total number up to 241 million vs. Facebook's 1.2 billion, investors are concerned that the company is hitting a ceiling here. Twitter also released some concerning data regarding its user engagement, with timeline views per user down to a six-quarter low.

In the video, Evan explores why, like the early days of Facebook's reporting when it discussed "like" metrics, Twitters reporting approach of timeline views per user might one day be replaced by more meaningful metrics; but he also looks at why Twitter may not have as much mainstream appeal as Facebook does, and what, if anything, the company can do to change that.

Looking for more big growth picks for 2014?
They said it couldn't be done. But David Gardner has proved them wrong, time, and time, and time again, with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently, one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

The article Why Twitter Got Crushed Yesterday originally appeared on Fool.com.

Erin Kennedy has no position in any stocks mentioned. Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published