Twitter Stock Punished ‘Over and Above What Was Justifiable’ Due to Early Q1 Earnings Leak

CityIndex analyst tells TheWrap: “The bungle definitely contributed to the share price loss,” but miss on forecasts was prime culprit

TWTR stock drop

Someone at Twitter Investor Relations is in the birdhouse — er, doghouse this morning.

On Tuesday, about an hour before the end of the trading day in the U.S., Twitter evidently leaked its own lackluster first quarter 2015 financial results by accident. Self-described “financial intelligence platform” Selerity discovered the blunder and (ironically) tweeted out the results around 3:08 p.m. ET, causing a big, expensive problem for the 140-character company.

Immediately after the early share, the stock started a hard fall (pictured above) — probably harder than its actual financials warranted, CityIndex Senior Market Analyst Ken Odeluga told TheWrap. TWTR dropped quickly from $51.21 per share all the way down to $41.84. It closed at $42.27, down 18 percent overall. In after-hours markets, Twitter stock dipped an additional two percent.

At the time of this writing, TWTR was trading down a few bucks further per share Wednesday morning.

“There appeared to be some punishment of the stock over and above what was justified by the results themselves,” Odeluga said. “The bungle definitely contributed to the share price loss, but in the end the fall moderated to a more reasonable level — one that reflects the fact that Twitter failed to match its own revenue expectations during the quarter, thereby calling into question the 50-percent rise of its stock since Q4.”

Twitter missed Wall Street’s mark on revenue and mobile Monthly Active Users. It slightly topped Earnings Per Share estimates.

In its Tuesday press release, Twitter lowered its own internal 2015 projections, likely removing additional confidence from current and potential investors.

“The earnings themselves and the debacle of how they were released will not help CEO Dick Costolo’s fight back against some well-known voices on Wall Street who have been indirectly questioning his suitability since last year,” he continued.

However, ‘There’s definitely something promising brewing on the revenue side,” Odeluga countered himself, citing the company’s fire hose and API licensing, its search agreement with Google, and tweaks to audience metrics for advertisers. But again, there’s a flip-side to mitigate even that optimism.

“Problem is, it will take time for these initiatives to bed down/gain traction, and more time is not necessarily what Wall Street is prepared to give the current core management after several disappointing quarters exacerbated by ‘non-operational missteps,’” he continued. “It may be time for more aggressive commercial measures to resolve the dilemma between the obvious ubiquity, utility and penetration of the medium on the one hand, and difficult-to-pin-down chargeable parameters on the other.”

“I think it’s doable, but it might be time for the current team to let others have a go,” the analyst/grim reaper concluded.

Twitter IR did not respond to TheWrap‘s request for comment on the matter, but posted on its own platform: “We are investigating the source of the leak.”

Below is Selerity’s public explanation, once again ironically posted on Twitter, in which it disavows any such leak on its end. The company did not have more to say when reached by TheWrap.