Twitter’s Growth May End Up in Trouble!
The use of Twitter has been increasing with approx 166 million using it every day in the first half of the year. Most of them use it to gather and comment on the ongoing lockdown.
This is the first time that the social media handle has gone up from 134 million last year. However, this growth is not going to help its business as many ads have been ignored due to the pandemic crisis and this will create trouble for CEO Jack Dorsey who is helpless in balancing a few investors.
The advertisement profits have been going down from March and from the 11th of March, it has been witnessing a 27% fall for a year. Eventually, it has made only $20 million than its expected $80 million revenue by the end of the month.
Twitter stated that: The quarter has witnessed ‘two distinct periods’ and from “January through early March, which largely performed as expected” and “early March through the end of the quarter when the pandemic became global.” Twitter says the downturn “was particularly pronounced in the US.”
Twitter CFO just said its ads business so far in April is similar to what they saw at the end of March — when sales were down 27%
“That gives you a good sense of what it’s been like for us," CFO Ned Segal said$TWTR stock, up 10% about an hour ago, now DOWN 4.6%… https://t.co/OIAYvsYhx6 pic.twitter.com/V5OqccZA1e
— Kurt Wagner (@KurtWagner8) April 30, 2020
The results state that the usage of the app is higher like the other apps as people are under lockdown and searching for the latest updates. This hints that the ad profits might face a drastic fall in the upcoming quarter.
As of Twitter, the issue is even worse as their competitors like Snap and Facebook have seen tremendous revenue in spite of the current situation. So, the social media firm has not been providing any signs on how it will perform in the upcoming quarter as there is “unprecedented uncertainty and rapidly shifting market conditions.”
This could be a threat to Dorsey’s position as earlier before lockdown Twitter had made a deal with Elliot Management that enables to increase usage and ensure revenues. If Twitter couldn’t make it then: “Dorsey could still be replaced or investors could push for a sale of Twitter,” reported a source.
