over 3 years ago • 2 mins
Twitter reported weaker-than-expected second-quarter earnings on Thursday, and investors were quick to make their opinions known – from behind their screens, obviously 💻
The number of active users on the platform was 34% higher than the same time last year – the fastest growth since Twitter first reported the metric. That was way higher than investors were expecting, as more and more homebound folks tried to stay up to date with the good, the bad, and the ugly of the last few months 👀 But Twitter also felt the effects of the slowdown in advertising spending – driven by both civil unrest and the financial toll of the pandemic – and its revenue fell by a bigger-than-expected 23% versus the same time last year, leading its quarterly profit to miss forecasts too.
Twitter’s stock initially rose 6% on Thursday. That might’ve been because investors saw positive signs for the future: more monetizable users, after all, should result in even higher revenues for the company – or at least, it should when advertisers start spending money to win over customers again 🐦 But the enthusiasm for Twitter’s stock is also at odds with some potentially more damaging developments: the company’s ban on political ads last year, the US government’s mooted decision to remove lawsuit protections, and – more recently – a major hacking scandal.
Snap’s stock fell earlier this week after the company’s quarterly results showed its lockdown-induced boost in activity had already subsided. Investors will now try to work out what Snap and Twitter’s updates mean for Facebook’s earnings next week 🤔 On the one hand, its last quarter was better than predicted, and recent boycotts from advertisers aren’t expected to impact its earnings much. But on the other, it’s bigger than the rest of them – so if they're struggling, it might be too.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.