Two of the biggest social media platforms lost nearly one-fifth of their market value after reporting disappointing user growth.
Twitter Inc’s stock plunged on Friday after it reported a decline in its monthly users and said that the number could fall further in the coming months. The 20.5 percent plunge came one day after Facebook Inc lost 19 percent of its value in a single day.
On Wednesday, Facebook said that its revenue growth would slow significantly for at least the remainder of the year and that expenses will continue to skyrocket.
The next day, the company saw its biggest one-day drop in history.
Twitter had 335 million monthly users in the quarter, below the 339 million Wall Street was expecting and down slightly from 336 million in the first quarter. That overshadowed strong monthly user growth of 3 percent compared with the previous year.
The company said its monthly user number could continue to fall in the “mid-single-digit millions” in the third quarter.
While Friday was Twitter’s second-worst loss since it went public in November 2013, the stock has still doubled in value over the past 12 months.
Long criticized for allowing bad behavior to run rampant on its platform, Twitter has begun to crack down, banning accounts that violate its terms and making others less visible.
Twitter is now attempting to rein in the worst offenders after years as one of the Wild West corners of the Internet.
Twitter on Friday reiterated its efforts to “to invest in improving the health of the public conversation” on its platform, making the “long-term health” of its service a priority over short-term metrics such as user numbers.
As part of these efforts, Twitter said that as of May, its systems identified and challenged more than 9 million accounts per week that are potentially spam or automated, up from 6.4 million in December last year.
The company has previously disclosed these numbers.
A Washington Post report put the total number of suspended accounts in May and last month at 70 million.
The Associated Press said that Twitter suspended 56 million such accounts in the final quarter of last year.
While Twitter said that most of these accounts were dormant and thus not counted in the monthly user figure, the company also said that its cleanup efforts could affect its counted user base, but did not give specific numbers.
“We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviors that distort and distract from the public conversation,” Twitter chief executive officer Jack Dorsey said in a statement.
Twitter’s market value on Friday dropped by more than US$6 billion, to about US$26 billion.
Investors still value Facebook at US$503 billion. Facebook lost US$119 billion in value on Thursday.
Twitter’s second-quarter net income hit US$100.1 million, after a loss last year during the same period. It was the company’s third profit in a row, the third it has ever posted.
Per share, the San Francisco company’s net income was US$0.13, or US$0.17 adjusted, in line with expectations, according to a poll by Zacks Investment Research.
Revenue was US$710.5 million, up 24 percent and edging out expectations of US$696 million.
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