FTSE dropped 0.8 percent, 51.75 points, on Tuesday
20:57 GMT, October 27, 2015
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Twitter shares dropped 12 percent in after hours trading today after the tech firm posted a weaker than expected revenue forecast and slow user growth.
The company forecasts fourth quarter revenue of between $695 million and $710 million.
According to Thomson Reuters I/B/E/S analysts, on average, expected Twitter to post a figure around $739.7 million.
Twitter said that the number of average active monthly in Q3 was 320 million, up from 316 million in Q2, but still below what analysts expected of 324 million.
Facebook currently has about five times as many users as Twitter.
The company reported revenue of $569.2 million and adjusted earnings per share of $0.10, beating expectations of $0.05 per share off of sales of $559.6 million.
It reported a loss of $131.7 million, or 20 cents per share, down from $175.5 million, or 29 cents per share, last year, but still not good enough to assuage the concerns of investors – particularly given lackluster user growth.
Jack Dorsey was appointed as the firm’s chief executive officer earlier this month and he has already made some major changes in the way the business is run.
In an effort to improve efficiency he cut the workforce by 8 percent and poached Google Inc. executive Omid Kordestani to serve as executive chairman of Twitter’s board.
Dorsey also posted the following tweet earlier this week stating that one third of his Twitter stock would be given to the company’s employee equity pool:
” src=”http://s.w.org/images/core/emoji/72×72/1f425.png” scale=”0″/>
” src=”http://s.w.org/images/core/emoji/72×72/26a1.png” scale=”0″/> I'm giving ~1/3rd of my Twitter stock (exactly 1% of the company) to our employee equity pool to reinvest directly in our people.
— Jack (@jack) October 23, 2015
Paul Sweeney, a Bloomberg Intelligence analyst, said: “Twitter remains a wait-and-see story,”
He added: “Investors were hoping that this quarter would finally get the stock out of the doghouse.”
Morgan Stanley downgraded Twitter’s stock last week to a sell rating. The bank said that the company’s ability to reach revenue targets is threatened by weak user growth and lackluster advertising demand.