Saturday 24 December 2016

Twitter Shares Plunged This Week


Twitter shares plunged this week, wiping billions of dollars from its value after a mass departure of top executives renewed fears the company won't weather the storm that began when hopes of a sale collapsed earlier this year.

The embattled social network's shares fell 10pc from Tuesday to Friday after top executives Adam Messinger, chief technology officer, and Josh McFarland, vice president of product, announced they were leaving.

The news sent shockwaves through Twitter's stock and wiped $1.12bn (£914m) off its value. Having initially dropped 4pc on Tuesday, the share price has continued to decline through the week.

It is the second major exodus to hit the company in recent months, with Adam Bain, chief operating officer, and Richard Alfonsi, vice president of advertising sales, both leaving within the past six weeks.

Analysts said the news was grave for Twitter and suggested it could be hard for the company to recover. Trip Chowdhry, co-founder at Global Equities Research, went so far as to call the social network "toast" and "not even a $10 stock".

Jack Dorsey, Twitter's chief executive and co-founder, has struggled to reverse the company's fortunes since his return last year. Despite lofty expectations, it has not made a profit in its 10-year history and its losses have been mounting. Added to that, user growth has stalled at around 5pc.

The company confirmed at the end of October that it would lay off hundreds of members of staff as it announced its ninth quarter of declining revenue growth, and it became clear hopes of a bidding war would not be realised.

But Dorsey remained positive when Messinger and McFarland announced their resignations were announced earlier this week. "We've shown our strategy is having a direct and positive impact on our audience growth and engagement," he said. "I'll be working even closer with our engineering and design teams to ensure we continue to be the fastest and best service to show what's happening in the world."



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