'Somrthihng is wrong. Thanks for noticing - we're going to fix it up and have things back to normal soon.' That's a typical Twitter error message that pops up when things at the micro-blogging site aren't up to scratch.
Perhaps that's a message that is right now playing out in the minds of its promoters as markets display a marked lack of confidence in Twitter's future.
Sputtering user growth and hundreds of million in losses announced yesterday were enough to push Twitter shares down by 17 per cent , resulting in a Dh3.3 billion decline in the net worth of its CEO and two co-founders.
Yesterday, Twitter, the micro-blogging site, reported a net loss of $511 million (Dh1.88 billion), compared with a loss of $8.7 million (Dh32 million) a year ago. And this was despite the firm finishing the year with its strongest ever financial quarter.
“Twitter finished a great year with our strongest financial quarter to date,” said Dick Costolo, CEO of Twitter. “We are the only platform that is public, real-time, conversational and widely distributed and I’m excited by the number of initiatives we have underway to further build upon the Twitter experience,” he noted in a statement.
Overall, the company ended the year 2013 with 241 million monthly users, an increase of 30 per cent year-on-year, and an average of 184 million mobile users in the fourth quarter of 2013, an increase of 37 per cent.
That, however, wasn’t enough to make investors happy, who voted with their wallets and the Twitter share tanked 17 per cent in after-hours trading, wiping almost a billion dollars off the collective balance sheet of its CEO and two co-founders.
CEO Costolo and two of its co-founders, Evan Williams and Jack Dorsey, collectively lost $900 million (Dh3.3 billion), according to a Wealth‐X estimate, after the San Francisco‐based micro‐blogging company released on Wednesday its first earnings report since it went public in November last year.
The primary reason behind investor disappointment that was slow user growth and, importantly, Twitter’s revelation that the number of ‘timeline views’ – its equivalent of page views, and a key measure for advertisers – dropped for the first time in the last quarter of 2013 to 148bn from 159bn.
On average, users refreshed their Twitter feeds 613 times a month during the quarter, down 10 per cent from 685 times in the third quarter. Investors saw weak growth in the number of active users on Twitter, pushing the value of its shares down by as much as 17 per cent in after‐hours trading.
But the growth of the user base has slowed, with Twitter adding only 9 million users in the final quarter of 2013. According to Wealth‐X’s estimates of the personal fortunes of Costolo, Dorsey and Williams at and after-market close on February 5, 2014, CEO Dick Costolo’s net worth declined by almost a fifth, from $590 million (Dh2.17 billion) to $480 million (Dh1.77 billion), Jack Dorsey’s personal wealth fell a 7.4 per cent from $2.7 billion (Dh9.92 billion) to $2.5 billion (Dh9.18 billion), while Evan Williams suffered the biggest net loss, from $3.4 billion (Dh12.49 billion) to $2.8 billion (Dh10.28 billion).
Wealth-X estimated of the net worth of Costolo, Williams and Dorsey after accounting for their shares in public and private companies, residential and passion investments such as art, planes and real estate, and is based on the most recent publicly available disclosure of their shares and options in Twitter.