Shares of Twitter Inc. (NYSE:TWTR) tumbled Friday in premarket trade after it said monthly users dropped by one million in the second quarter, and warned that usage will decline further as the company escalates its fight against fake accounts and mean rhetoric.
The San Francisco-based social media network said in a statement that it had 335 million monthly users around the world in the second quarter, down from 336 million users in the quarter prior.
Twitter blamed the sharp drop on intensified efforts to clean up the platform and stricter privacy rules in Europe. Like Facebook, Twitter is working to comply with sweeping new data protection regulations across Europe.
READ: Twitter shares dip on investor concern that user growth may slow
The company said the decline was in part because of "decisions we have made to prioritize the health of the platform."
"We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviors that distort and distract from the public conversation,” Twitter CEO Jack Dorsey said in a statement. “We're also continuing to make it easier for people to find and follow breaking news and events, and have introduced machine learning algorithms that organize the conversation around events,” he added.
Investors punished Twitter with the same ferocity they had meted out to Facebook sending the stock reeling nearly 16% to US$6.83 in premarket trading Friday after the earnings results.
Lackluster earnings
For the quarter ended June 2018, Twitter reported earnings of US$0.17 per share on revenue of US$710.5mln. The Earnings Whisper number called for earnings of US$0.21 per share. Revenue grew 23.8% on a year-over-year basis.
Contact Uttara Choudhury at uttara@proactiveinvestors.com
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