Twitter’s own platform was partly to blame for the afternoon chaos that sent its share price tumbling. The company stopped trading on its shares after its Q1 financial results — due to be released after the market closed — were tweeted by research firm Selerity. The share price fell 5.8% before trading was halted. Its hand forced, Twitter released its earnings statement and allowed trading to resume. The stock finally closed down 18.2%.
The problem: Twitter missed Wall Street’s revenue forecasts, and lowered its guidance for 2015. The company generated $436 million in revenue in Q1 vs expectations for $456.8 million. It had a net loss of $162,4 million, down 22.7% from the period in 2014. But after factoring out a $183 million stock-based compensation expense, earnings came in at 7 cents a share — ahead of forecasts for 4 cents.
The revenue miss was due to “lower-than-expected contribution from some of our newer direct response products,” CEO Dick Costolo says. “It is still early days for these products, and we have a strong pipeline that we believe will drive increased value for direct response advertisers in the future.”
Despite the lower financial guidance, the company is “confident in our strategy and in Twitter’s long-term opportunity, and our focus remains on creating sustainable shareholder value by executing against our three priorities: strengthening the core, reducing barriers to consumption and delivering new apps and services,” the CEO says.