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Twitter Reports Weak Earnings and the Stock Is Crashing
- ceejayoz 11y agohttps://twitter.com/Selerity/status/593136296236752896 https://twitter.com/Selerity/status/593136296236752896 "Today’s $TWTR earnings release was sourced from Twitter’s Investor Relations website https://investor.twitterinc.com https://investor.twitterinc.com . No leak. No hack." Looks like someone found a draft post. Yeesh.
- jonknee 11y agoEven better is that NASDAQ runs Twitter's IR site...
- metaprinter 11y ago"The data was released in a format that only a computer could detect, Christinat added." does anyone know what's meant by this 'format'? USA Today http://www.usatoday.com/story/tech/2015/04/28/twitter-selerity-leak-tweets-earnings/26528903/ http://www.usatoday.com/story/tech/2015/04/28/twitter-seleri...
- jessaustin 11y agoI'm thinking that the revealing PDF was linked on an RSS feed. People don't read XML directly, because it looks funny in the browser... b^)
- SilasX 11y agoSo ... someone tricked a bot into triggering an uninformed crash of the stock? Pretty clever, if true.
- jessaustin 11y agoMy understanding is that the "crash" was actually better-informed than Twitter had intended. They do have a bad earnings report, which was released sooner than they intended. Perhaps before various insiders' sell orders had a chance to complete? b^)
- slapshot 11y ago> which was released sooner than they intended The major markets (NYSE, NASDAQ) require that major news be released 15 minutes before the markets open or after the markets close, to give participants time to "digest" it without racing to trade. Earnings are almost always released just after the markets close or early in the morning for this reason. E.g., here's a schedule of upcoming releases: http://www.earningswhispers.com/calendar.asp http://www.earningswhispers.com/calendar.asp . A major news release by the company during trading hours is supposed to trigger a 15-minute pause in trading (which we saw in Twitter's case). It's an open question as to whether that makes sense in an era of nearly 24/7 liquidity in official and unofficial after-hours trading networks, but Twitter was likely trying to follow official protocol. It's also not clear when there's so much other near-instant trading, but the idea is that the company can at least (in theory) give a level playing field for its own news by releasing when everyone has time to read before trading.
- ForHackernews 11y agoSo can we assume Twitter will be pressing charges under the CFAA?[0] /s [0] https://www.eff.org/cases/us-v-auernheimer https://www.eff.org/cases/us-v-auernheimer
- dismal2 11y ago> “It calls into question why they didn’t see this coming,” said Victor Anthony, an analyst at Axiom Capital Management, who has a buy rating on Twitter’s stock. “I don’t think anyone ever questioned their ability to generate revenues.” Hmm, I thought everybody did? I guess wall street really does have a clear view of this whole tech scene.
- serve_yay 11y ago> Victor Anthony, an analyst at Axiom Capital Management, who has a buy rating on Twitter’s stock What's that quote about getting someone to understand something that their job depends on them not understanding?
- EC1 11y agoI googled your exact question and got this: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
- danieltillett 11y agoI think the OP was asking a rhetorical question.
- Jare 11y agoThey have been able to generate revenue for a while. I found this writeup a very interesting read: https://medium.com/backchannel/how-twitter-found-its-money-mojo-1d170e3df985 https://medium.com/backchannel/how-twitter-found-its-money-m...
- DonHopkins 11y agoI love how "I don't think anyone ever questioned" can mean two different things: either everyone assumed they could make money, or nobody ever even bothered to ask the question if could they make money, let alone knows the answer.
- austenallred 11y ago
- Tiktaalik 11y agoRandom question: How do I stop videos from auto starting on Bloomberg? I'm running Safari with no Flash, and have Ad-block on. Video doesn't start, but audio does. Super Annoying.
- noondip 11y agoDisable Javascript or install uMatrix to block frames/XHR entirely.
- dikaiosune 11y agoRelated, it would be great for HN to be able to tag stories as having auto-playing audio, a paywall, modal ads, and other undesirable elements of a posted story's site.
- briandear 11y agoIt would be great if paywall stories weren't allowed.
- dikaiosune 11y agoEven better!
- blumkvist 11y agoBut, but, but... ads and adblockers and how eveil ads are and let's block them! Let's pay for content and all that jazz.
- dredmorbius 11y agoLet's motivate for a content syndication alternative. https://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-for-the-uk/ https://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-f... Advertising is a net negative on far too many fronts.
- 11y ago
- johnpowell 11y agoI remember that CNN was all Twitter all the time a few years ago. I haven't watched until today for Baltimore info. No mention of Twitter in the last six hours of watching.
- serve_yay 11y agoI watched the coverage all day yesterday. The police were talking about their Twitter as the official way to stay updated, and the news anchors frequently were talking about who tweeted what. Maybe CNN just has something against Twitter now, who knows.
- rodgerd 11y ago> Maybe CNN just has something against Twitter now, who knows. Why use a 24 hour news network when you can just get on-the-ground views from Twitter? That's probably what they have against it.
- johnpowell 11y agoI'm talking more about CNN putting tweets up on the screen and discussing the contents of the tweet. Like when a tweet about MH370 being sucked into a black hole was discussed by a panel.
- serve_yay 11y agoYes, and I'm saying maybe someone in their company decided that Twitter is bad, or maybe some Twitter VP ate the sandwich that person wanted to eat, or they decided Twitter is a competitive threat, or whatever. As I said, who knows.
- dragonwriter 11y agoOr maybe the novelty wore off.
- oldmanjay 11y agoThey might be afraid that speaking of the internet will bring down the rage of The Hacker 4chan.
- themodelplumber 11y agoThis probably shouldn't be surprising news but it has some shock value. Twitter is very close to what some would consider a model civic communications platform. I remember hearing one tech pundit refer to it as "citizen's band radio for the 21st century." The idea that such an effective tool needs to generate revenue a la Facebook seems odd, even though I understand that it operates like any other business entity.
- joeblau 11y agoYeah you do make a good point. One term that really resonated with me for Twitter was "The pulse of the Internet"
- mgkimsal 11y agorevenue yes; profits... and perhaps even gratuitously obscene profits... probably not. but people wouldn't have invested in a "cb radio" system years ago. Wikipedia feels the need to beg every so often - not sure people would want to see that in their twitter streams, but I'm not sure who's really happy about ads either.
- Sideloader 11y agoFWIW, the Tweetbot client (iOS) filtered out ad content by default. Haven't used it in a while, however, so this may have changed.
- marssaxman 11y agoI would not consider a proprietary, monopoly-controlled communications platform to be a model for anything.
- themodelplumber 11y agoI don't see why not. You can take the result of some effort and say, OK, this is a model for the kind of result we'd like, but are not currently getting from our more open, idealistic systems. There would probably be many benefits to such, err...open ways of thinking.
- gstar 11y agoI bet the mood there is REALLY sombre. Leak or not, missing earnings is a career limiting move for management. And it was a HUGE market reaction for an earnings miss, kinda implies that the market isn't convinced by the fundamentals of the stock. Ouch!
- wslh 11y agoI never understood Twitter management. Just accepting small and medium sized companies to consume their firehose and charge for that will be enough to significantly increase their earnings. This was the Google AdWords breakthrough.
- themoonbus 11y agoI really find it hard to believe that firehose revenue would be anywhere close to ad revenue.
- wslh 11y agoWhy not? there are a lot of companies looking to analyze their own market possibilities. BTW: Lot of downvotes instead of replies.
- themoonbus 11y agoYeah, but I'd imagine the number of companies who want to advertise something dwarfs the number of companies doing data analysis. It's mass market vs niche market.
- spullara 11y agoYou can do that through gnip.com, which they own. It isn't close to their advertising revenue.
- upofadown 11y ago>Twitter cut full-year revenue guidance to $2.17 billion to $2.27 billion, from the previous range of $2.3 billion to $2.35 billion. I find it astonishing that what is basically a short message broadcast service can generate billions of dollars of revenue. So I think that they have to be doing something very right. Perhaps everyone is anticipating the inevitable next hot thing a little bit too hard.
- testingonprod 11y agoThey can generate that much revenue because they have scale. It's not just a short message broadcast service.....it's a short message broadcast service with 300,000,000 users.
- borgia 11y ago>I find it astonishing that what is basically a short message broadcast service can generate billions of dollars of revenue. Basically a short message service? That's naive. Twitter is a marketing platform with 300m people signed up to receive marketing materials, people who also readily provide the platform with the details of what they like/would likely click on/spend money on, where they are in the world, what age they are, what gender they are and more. Of course it's extremely valuable.
- lotsofmangos 11y agoI like Stewart Lee's take on it. "a government surveillance operation run by gullible volunteers, a Stasi for the Angry Birds generation”
- tomjen3 11y agoThat is a rip of of the Onion: http://www.theonion.com/video/cias-facebook-program-dramatically-cut-agencys-cos,19753/ http://www.theonion.com/video/cias-facebook-program-dramatic...
- lotsofmangos 11y ago
- swingbridge 11y agoTwitter is just a sign of what's to come for a lot of new tech companies. The street wants profit. Once you go public the whole cool startup party ends (unless you can be a cool startup AND hit your profit numbers). It's time to be a real business or pay the price of being an overvalued pile of stinking financial junk.
- PublicEnemy111 11y agoThe downward pressure came from Twitter missing revenue expectations, not profit.
- swingbridge 11y agoYes, but the street cares about revenue because they care about profit. If you have high costs you can always just say you had a bad quarter but profit will come when costs come down. Even if Twitter fired half its people and cut costs like crazy they'd still struggle to justify their current valuation. The street is angry at the reveune numbers since on this current trajectory there's not really a clear path for how the company can generate enough profit to justify its valuation... unless their revenue skyrockets, which is looking less and less likely evey quarter.
- dinosammy 11y agoThe reaction makes a lot of sense. Their revenue is miniscule compared to a $34 billion market cap. That market cap can only be justified by massive future revenue growth. The results are indicative that the future revenue growth might not be as massive as people thought it was.
- swingbridge 11y agoTwitter is currently valued at >10x revenue, is unprofitable and future revenue projections are being dialed back. The hype has worn off. It's going to get real ugly real fast unless they can post some decent results real fast.
- downandout 11y agoWhile I understand Twitter from a technical perspective, I have never understood why a large number of people use it. The value proposition for an average person is effectively zero. It's great for businesses and celebrities, but one-sided value propositions tend to not work out long term. We are now starting to see that inevitable result play out. You can only defy gravity for so long.
- hyperpape 11y agoYou read things you like reading. There's more to be said about why you use Twitter instead of one of the other places you could read things, but the basic "value proposition" is actually simple.
- ams6110 11y agoWhile we will never return to the pre-social-media days, perhaps the infatuation had faded. The current generation entering their teens has never really known a time without it. There's no real novelty to it. The distinction between mindless time wasting and real usefulness may be more clear.
- pnathan 11y agoThe serious interactive users of twitter typically use it like a threaded IRC channel, with added benefit of being able to search based upon user and hashtags. I've used it to good effect to watch real-time events like protests and riots.
- PublicEnemy111 11y agoI think the writing is on the wall for Twitter. The younger generations are increasingly flocking to snapchat, yik yak, and similar apps. I never hear of anyone using it anymore(college student here). I would have stopped facebook a while back as well if I didn't use OAuth for damn near everything
- exacube 11y agoi think the problem is in generating revenue. According to their numbers, Twitter's user base is still trending upwards no?
- PublicEnemy111 11y agoIt is still growing, but the momentum has been slowing for over a year. I googled, "twitter user growth" and every result points to disappointing user growth
- ams6110 11y agoWell at some point growth has to slow. There are a finite number of people interested in what Twitter has to offer.
- onewaystreet 11y agoRevenue hasn't been a problem, Twitter will do over $2 billion this year. Wall Street has been fixated on user growth though. Probably thanks to Facebook touting its ever increasing user base.
- istvan__ 11y agoThis is one dimension of the problem. I think from the technical point of view having a more efficient stack that cost you less and the change in the system is cheap (aka software engineering time) can make your product more profitable even though your competitors offer more features. This sort of angle is missed quite often in the startup scene, while older mature companies care about it a lot more. A good example would be Amazon.
- 11y ago
- Lorento 11y agoI can understand why investment type people like y-axes that don't start at zero - they're usually interested in tiny changes a long way from zero. But for the general public to watch? If you didn't already have an up to date feeling for the price of Twitter shares, then this whole report is meaningless without finding the -$9 and doing the calculation yourself. She even points out that it's now $40 but not what it was before. Are most viewers really that tuned into the market that they know the prices of things before they're in the news? Turns out this is only something like 20% drop making it the same as February this year! Nothing spectacular at all. It endured a similar crash in October last year and took a few months to recover. https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=twitter%20share%20price%20history https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...
- frostmatthew 11y ago> Turns out this is only something like 20% drop making A 20% move is huge for any stock (most don't move that much in a year!), and it's certainly far outside the norm for TWTR[1]. [1] http://stockcharts.com/h-sc/ui?s=TWTR&p=D&b=5&g=0&id=p29806926087 http://stockcharts.com/h-sc/ui?s=TWTR&p=D&b=5&g=0&id=p298069...
- fixxer 11y agoIrony is a black box trading system listening to the firehose and picking up that nugget.
- alexashka 11y agoMeh, I don't get it. They're making money, they grew to 18% more active users (that sounds like a lot), what seems to be the problem?
- AustinG08 11y agoWelcome to the stock market. If I had to guess, they predicted bigger growth, which in turn set higher valuations and expectations.
- wutbrodo 11y agoThe way stock prices work is that the price of a company's stock (or more relevantly, the price*num_shares) incorporates their current earnings as well as their potential future profits (which is driven by the company's forecasted growth). Updates on how the company is actually performing (e.g. earnings releases) are a chance to get concrete information that allows everyone to update their expectations of future growth. If the market at large was expected some number $N, and the actual released figure less than $N, then self-evidently the expected growth would be adjusted down. If I expect that I'll have 50,000 dollars in the bank a year from now (starting from 0), and 6 months in I only have 15,000 dollars, then naturally I would adjust my expectations downwards.
- alexashka 11y agoOk but from my understanding - you get to buy and sell stocks. So when twitter says that instead of earning say 300 million, they a bit less like 280, why is this a big problem? Did they expect the stock to be valued higher and because it has not lived up to that, they're selling it and buying a different stock that will do that?
- swingbridge 11y agoIt's both what they just did and what they are trending towards in the future. twitter is currently valued at say $35 billion then long term to justify that valuation per what the stock market demands long term they need to consistently generate around 2 billion a year in profit. If they do really well and have say a 25% margin they'd need $8 billion a year in revenue to operate at that level. Current revenue projections are closer to 2 billion and are being scaled back by executives and they're not consistently profitable at all. There's a big gap between where they need to be to support the current stock price and where they are (and seem to be heading in the near and mid term). That's why the stock is under a lot of negative pressure.
- cryowaffle 11y agoYa'll need to chill out and look at a price chart of TWTR over time. This is very common run-of-the-mill volatility. Source: http://stockcharts.com/h-sc/ui?s=TWTR&p=W&b=5&g=0&id=p87079254187 http://stockcharts.com/h-sc/ui?s=TWTR&p=W&b=5&g=0&id=p870792...
- nkrumm 11y agoWell, chilling is perhaps still the right thing to do, but the daily view does tell a different story: http://stockcharts.com/h-sc/ui?s=TWTR&p=D&b=5&g=0&id=p45640186036 http://stockcharts.com/h-sc/ui?s=TWTR&p=D&b=5&g=0&id=p456401...
- minimax 11y agoAnother way to look at it is that Twitter's first trade on the NYSE in November 2013 was at $45.10, and today, almost a year and a half later, it closed at around $42. That is not a whole lot of return for what is supposed to be a growth stock. It's also not a particularly great story to tell prospective employees if you're trying to attract them with stock-based compensation.
- sukilot 11y agoPublic companies give RSUs to employees. Which don't need a grown story.
- nandemo 11y agoIf the share price isn't going up, one would rather get paid in cash.
- marssaxman 11y agoOne would generally always rather get paid in cash, which can be used to invest in a diverse portfolio of valuable investments.
- what_ever 11y ago
- needhelpplz 11y agothis is my theory that the current economic model we have of dot com stocks is very much flawed, grossly overvaluing future potential revenues vs. current revenues. This argument never makes sense to me, unless you are investing in infrastructures like oil rigs or telecom grids that have a very sure and quantifiable return on investment, this is a mystery with a lot of dot com companies, especially for those that fail to demonstrate ability to earn. I think a market correction is long overdue, I believe that after this year, capitals will be tougher to come across, companies that didn't really innovate but instead captured markets by burning cash won't be able to sustain this level come rainy season when capital market dries up for these firms.
- arasmussen 11y ago"Crashing" is a bit inaccurate. It dropped and has now stabilized at a lower price. Crashing would imply that it's continuing downwards, which it isn't.
- interesting_att 11y agoDid anyone expect any different from Twitter? Their main platform needs significant improvement. Biggest disadvantages for Twitter: 1) People are flocking to other social messaging apps, especially the mobile variants (Snapchat, Instagram, etc). I suspect because its coolness factor is waring off, because of rampant trolling, and poor discovery. 2) Most of Twitter advertising is useless, in large part due to poor data collection. I have yet to see any performance campaigns really kill it on the platform. Brands only advertise because they are easily misled by agencies. Can anyone offer realistic suggestions to help improve the company's outlook? Here are some random thoughts: 1) Trying to take a piece of the mobile ecosystem seems like a smart move, as they show genuine expertise. I liked their acquisition of MoPub and every developer seems to use Crashlytics. People seem to use Periscope and Vine often, as well. This could lead to a lucrative formula: Making apps easier to build with their tools, nudge developers to monetize through MoPub, and then take the plethora of learnings from the latest mobile craze and build an awesome new app. 2) They need to better monetize news, not just social interaction. How much content is written today because "Person said X offensive statement on twitter"? Twitter gets $0, despite the fact most news comes from them. Maybe try to attempt to be the Bloomberg Terminal for all news going forward? How about trying to beat Nielsen (16bn market cap) in actually monitoring sentiment? This obviously would take some ingenuity, but could be very rewarding. They seem to be trying this strategy, with some of their recent acquisitions. 3) Find out what other countries want. There is still a huge untapped marked in the 3rd world. Twitter could expand there by offering new services. 4) Somehow disincentivize blowhards from going on Twitter too often.
- IndianAstronaut 11y ago>Most of Twitter advertising is useless My comlany stopped doing Twitter advertising. It is basically marketers marketing to eachother. The whole thing is gamed. Not to mention it is opaque, expensive, and clunky to use. Sharp contrast with say google adwords.
- tomjen3 11y agoInteresting about 75% of the ads I see on Twitter are for products that I might actually be interested in. This is way higher than e.g Facebook (which seems to think I want to play a free to pay game or sign up for bad dating sites or get my degree again) which suggest to me that Twitter is doing something right and it can't be data collection because Facebook knows so much about me (including that I graduated from the very place they wanted me to get the degree, with that exact degree). What may be happening is that the ads on Twitter are better targeted to technical users.
- dataker 11y agoI see boomers yelling 'the bubble is bursting'.
- caseyf7 11y agoAs a developer, how accurate do you think Twitter's user numbers really are? There are a ton of fake accounts out there. Some are semi-legit (for development), but there are millions of followers available for purchase and Twitter has only removed a fraction compared to Facebook from my anecdotal evidence. What do you think?
- jacquesm 11y agoThis explains the deluge of dubious advertising at the top of twitter pages.
- lucb1e 11y agoMy personal reason for using Twitter less is the degradation of the website. Using J to scroll down has always been buggy with image posts and often resets to the first post, but newest 'feature' includes not being able to view threads inline. When clicking a tweet it will go to the details page (opening in a new tab doesn't work) and when going back you have to scroll down possibly hundreds of tweets. When opening images inline (that still works in most cases) the page scrolls up a random amount, anywhere between 5 and 50 tweets it seems. Copying image URLs using right click also doesn't work anymore when viewing an image (only from the tweet list can you copy it, then manually editing the URL to include ':large' works). And of course the ads, even though I don't see them, the J key doesn't skip them so I know they're there. Overall, the user experience becomes worse and worse. They said Twitter makes a good replacement for RSS feeds, but honestly I wish my Twitter feed was an RSS feed to be loaded in any reader I like.
- irascible 11y agoHow can you fuck up the UI on something as dumb as twitter? (not an active user, just an observer..) God I hope this bubble bursts soon.
- irascible 11y agoHow can you fuck up the UI on something as dumb as twitter? (not an active user, just an observer..) God I hope this bubble bursts soon.
- z-e-r-o 11y agoI started using https://tweetdeck.twitter.com/ https://tweetdeck.twitter.com/ especially for the above reasons. Somehow the JS is way more reliable on the tweetdeck site. It's a pity that even the widest column setting is way too narrow, it still feels more like a "management interface" than a Twitter home feed.
- mayneack 11y agodoes tweetdeck have ads?