Went public last November 11, Twitter started with a high-profile IPO of $26. The stock price went triple in December, and hit a high of $74 a share, but is now down to $ 43.57 a share. Although the company has reported sharply rising revenue for the past two quarters, the stock price went down by 11% after the company reported a meagre growth in new and existing usage during the third quarter.
In its financial report, Twitter’s revenue totalled to $361 million with $320 million in advertising, showing an increase of 114% compared to $169 million in the same period last year. The total net loss amounted to $175 million, a $110 million increase compared to $65 million in the same period last year. The increase in net loss is due to high expense for the its stock compensation, which accounted to $179 million in the third quarter. If excluding these expenses, Twitter earned a profit of 1 cent a share in the third quarter.
Why is the stock falling? Nate Elliott, an analyst at Forrester who studies social media, pointed out “The experience on Twitter today is the same experience people have always had on Twitter.”
The company’s lack of innovation and its slow pace of improvement are disappointing the public. Company like Twitter that are strongly dependent on technology and development should innovate continuously and lead ahead of its rivals to retain its market and to attract more users. On the other hand, Twitter’s rival-Facebook, “is constantly looking for ways to get people back on their site,” said Mr. Elliott.
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