Twitter''s First Public Year Disappoints

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Twitter''s First Public Year Disappoints

Nov 13, 2014 3:36 PM

NEW YORK�SNL Kagan has analyzed Twitter after the company''s first year trading on the public market.

Twitter opened on the NYSE last November to strong interest (up 73.5 percent on the first day to $45.10, then settling at $44.90). However, November 7 of this year saw the company''s shares closing at $40.31.

These numbers seem to confirm an initial suspicion that investors were too bullish on the stock and that it was over-valued initially.

Twitter's first public earnings report was revealed in February, disappointing anyone who had expected it to stack up to other Silicon Valley companies when it was revealed that its losses neared half a billion dollars.

This was despite the fact that the company had first gone into the black during Q4 of 2013; however, growth in the service''s monthly active users had been declining since 2011, slowing to the same rate seen currently by the more established Facebook. Now, the year-on-year growth of MAUs stands at 4.8 percent sequentially, and efforts to increase engagement with existing users have been unsatisfactory, with the projected timeline views to be flat at 181 billion for the fourth quarter of this year.

Twitter CEO Dick Costolo earlier has addressed these concerns through a better on-boarding process for new users; more varied integration of media; efforts to make Twitter more conversational; and a greater focus on contextualizing and sorting content. There are indicators that these measures have been successful, but the microblogging platform is still largely being out-performed by social media competitor Facebook.