Twitter Shares Plunge 15% After Purging Accounts

The number of users on Twitter dropped during the quarter that ended in June as the microblogging platform attempted to clean out fake accounts and comply with Europe’s new regulations about users’ privacy.

On Friday, the social media network said its monthly users during the second quarter reached 335 million across the globe, which were down from the prior quarter of 336 million. Twitter warned that the monthly users might drop in the mid-single-digit millions during the third quarter.

Twitter attributes the drop partly to the decisions it made to prioritize the platform’s health, and slightly less due to complying with the new, sweeping data protection rules across Europe.

Twitter shares plunged by 15% on Friday before the opening bell after releasing results for the second quarter.

During a conference call on Friday with analysts, CEO Jack Dorsey told listeners that Twitter was continuing to invest heavily in the improvement of the platform’s health, calling the investment the right thing to do not just for Twitter, but “for society as a whole.”

Twitter shares have close to doubled in 2018, as the microblogging site has showed signs of turning around, its first streak ever of quarters with a profit, and growth in both ad sales and users.

However, ahead of the earnings report on Friday, the markets seemed jittery after Twitter rival Facebook shocked investors with its warning of sales growth slowing during the second six months of 2018, as its focus is on putting privacy number one.

Twitter has been focusing on safeguarding its service of late amidst more scrutiny of the role it played in spreading fake news as well as election meddling. Twitter cracked down on its fake accounts by purging those it was suspicious about and removed 143,000 apps during the most recent three-month period for violation of its policies.

Twitter, like Facebook, is working on complying with the new General Data Protection Regulation put into place in Europe during the 2018 second quarter. It said during April that growth in monthly user could be impacted negatively by the new regulations.

Although the user numbers made investors nervous, business remained strong at Twitter as sales reached $711 million during the quarter, which was 24% higher than the same three months in 2017, and it posted a third straight profitable quarter.

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