Social media giant Twitter Inc (NYSE:TWTR), announced its 2nd quarter earnings that missed predictions and also gave downbeat outlook, bracing gossip about a possible sale of the company and also about the future of Chief Executive Officer Jack Dorsey.
With the stock coming down almost 15% on Wednesday, Twitter inc (TWTR) shares are down 50% since Dorsey returned last summer to the manage the social media company he cofounded.
Company failed to demonstrate any growth in its user base of a more than 300 million, a warning sign, and advertising incomes are showing shocking faintness; The company drops its forward revenue predictions for the next quarter to $590 million $610 million, while analysts had been predicting $681 million.
At a market capitalization of around $11 billon, in contrast with more than $40 billion at its peak, Twitter Inc could now be a more attractive takeover target.
Company shares rose for a short time earlier this month after Microsoft proclaimed its attainment of LinkedIn, as investors hoped for a similar deal for Twitter.
According to reports it was highly doubtful that there would be any move to oust Dorsey or actively seek a sale of the company anytime soon. Dorsey also work for payment company Square as a CEO, a dual role that many have questioned.
Twitter Inc (NYSE:TWTR) has find it hard to translate its high public profile into the kind of user growth that has driven likes of Facebook, which now claims 1.71 billion customers. The company has also suffered from management turmoil since its earliest days; Ex-CEO Dick Costolo, who was credited with quickly building the company’s advertising operations, resigned under pressure last June.
Than Twitter’s board of directors has been re-formed under Dorsey, with the addition of EX-Google executive Omid Kordestani as executive chairman and new members including Ex-Facebook CTO Bret Taylor, UK internet businessperson Martha Lane Fox and BET Networks chair Debra Lee.
Dorsey defined an improvement plan to emphasis on five areas: Twitter’s core service, livestreaming video, nurturing the site’s “creators and influencers,” creating an environment in which users feel safe and building better relations with thirdparty developers.
Analysts suggest that Twitter Inc (NYSE:TWTR) CEO Jack Dorsey Dorsey probably requires more time to earn the benefits of his turnaround plan, but patience seems declining. On analysts question about the value in remaining an independent company, Dorsey said that “there’s so much farther for us to go” as a company and business of importance. “I have a lot of confidence in our ability and that our five priorities are the right ones,” he added.