Twitter’s stock price dropped 15.16% on Friday, one day after the social media giant reported Q1 user growth that fell (slightly) short of what Wall Street had anticipated.
The stock drop pushed Twitter’s share price down to $55.22, wiping out nearly all of the company’s 2021 gains. Twitter opened the year trading at $54.43 per share, and later hit its 52-week high of $80.75 per share in late February.
On Thursday, Twitter reported it added 7 million new daily users during the first quarter, pushing the company to 199 million daily users globally. Wall Street analysts, before Twitter’s report came out, had projected the company would add another 1 million users on top of that and close Q1 with 200 million users.
The San Francisco-based company also reported earnings of 16 cents per share — a bit above the 14 cents EPS that analysts had projected — and revenue of $1.04 billion, which was just ahead of the $1.02 billion analysts expected. The bulk of Twitter’s sales came from $899 million in ad revenue. Sales increased 28% year-over-year. Twitter’s Q1 net income was $68 million, compared to a net loss of $8 million during the same time period last year.
In his remarks accompanying Twitter’s report, Twitter CFO Ned Segal said it was a “solid” start to 2021, but others disagreed. Bernstein analyst Mark Shmulik, in a note to clients shared with MarketWatch, said it was a “relatively average” quarter.
“OK revenues, OK engagement, OK guide apparently aren’t OK enough when the rest of the sector delivered big revenue beats and guidance raises,” Shmulik said.
Following its Friday decline, Twitter is now worth $44.3 billion.