Twitter misses out on ‘Trump bump’ as shares plummet and losses widen

Twitter Inc (NYSE:TWTR) shares plunged up to 9% in early trading Thursday, after its first quarter outlook came in well below expectations amid mixed fourth quarter results.

Twitter shares plunged after it reported losses widened amid a drop in ad sales, dashing hopes U.S. elections and Donald Trump’s tweeting frenzy would boost earnings.

The 52 week high of Twitter Inc’s shares is 25.25 whilst the 52 week low for the company’s shares is 13.73. Last quarter, the company attracted 31 million unique viewers last quarter by livestreaming around 400 events, thanks to partnerships with major sports leagues like the NFL and MLB while also harnessing the hype of the 2016 presidential election through partnerships with Bloomberg, BuzzFeed and PBS.

That balancing act is also front and centre for Twitter in markets outside the USA, including Canada. Including stock compensation, Twitter’s valuation jumps to 70 times RBC’s estimate for 2017 Ebitda.

Regardless of how people consume content on Twitter, the important facet of its big video push is that it opens up new ways to monetize content on the platform. Evercore ISI reaffirmed a “buy” rating and set a $17.00 price target on shares of Twitter in a report on Friday, January 6th. The company reports earnings Thursday morning.

The expectation of the analysts for Twitter is an earnings of about 12 cents/share down from 16 cents/share as compared to past year.

“Despite their troubles, 317 million monthly active users is an incredible number”, said Phil Davis, CEO of Phil’s Stock World Investments. On next day when data was publically announced, the stock’s closing price was $14.86 with -16.28% decline in its share price. During the same quarter in the previous year, the company posted $0.16 EPS.

The microblogging service, which has never made a profit, reported a 1% rise in fourth-quarter revenue to $717m (£571m). What’s more, during the fourth quarter, the company lost its CTO Adam Messinger, COO Adam Bain and VP of product Josh McFarland, which RBC Capital Markets analyst Mark Mahaney called a “very negative trend”, one which followed earlier executive churn in 2016. The company indicates a peak revenue level of $769.8M and $713.4M at bottom level. Its forecasts over growth are 30.00% during current year while analysts’ growth estimation for the next year is 15.40%.

The company’s top brass may disagree with Trump’s policies, but watchers of Twitter have expected Trump’s use of the platform to drive engagement at a time when overall growth has slowed. Twitter comprises 1.9% of Monetta Financial Services Inc.’s holdings, making the stock its 13th largest position.