twitter

Twitter Tumbles on Growth Fears

Twitter Sees Slow User Growth
The New York Stock Exchange is decorated for Twitter's initial public offering (IPO) in Lower Manhattan in New York on Nov.7, 2013. Richard Levine—Demotix/Corbis

Social network added the fewest monthly users since the fourth quarter of 2010

Shares in Twitter plunged about 22 percent in early trading on Thursday amid concerns that the social network not adding new users fast enough.

Twitter opened trading on Thursday at $50.61 a share, after closing at $65.97 on Wednesday. Shares were trading at just under $53 by 10:30 a.m. The stock, which began public trading in November, is down from a closing high of $73.31 in late December.

Twitter said Wednesday in its first earnings report as a public company that it had $243 million in revenue during the fourth quarter of 2013, up 116 percent from last year and beating analyst estimates. But the company also said it added only nine million monthly active users in that time, the smallest figure since late 2010, jolting investors and sending the stock down in after-hours trading.

“[Investors] have unbelievably outsized expectation for the firm,” Rick Summer, an equity analyst at Morningstar, told TIME on Wednesday. “The company is performing well, but the valuation is really divorced from how the company’s doing.”

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser