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Twitter Inc (NYSE:TWTR) “Flash Crash” Isn’t Based on Nothing

Shares of Twitter are at an all-time low now, and below the firm’s initial public offering (IPO) level.

jack dorsey twitter inc looks to Google inc facebook inc

In pre-market action on Monday, shares of the micro-blogging firm fell to $24.22 per share. Twitter went public at a price of $26 per share in November of 2013.

Twitter falls hard

The firm’s shares have fallen more than 20% since it reported second-quarter 2015 results on July 28.

The fall in Twitter’s share price is a result of the firm’s failure to make a profit and its slow user growth rate. The firm also hasn’t offered a clear vision regarding a permanent CEO.

Add those issues to the fact that the broader markets have sold off sharply over the last week and it’s clear why Twitter  share price is on a downtrend.

However, the CEO issue is probably weighing heaviest on the stock price at the moment. That’s because the firm is facing numerous challenges while lacking the proper leadership to address them.

Some analysts also believe that the firm went public before it was ready to do so. As a result, Twitter put a hold on innovative efforts to rein in costs. That was seen as an effort to provide some level of reassurance to shareholders, but it might have happened at the expense of long-term growth.

Twitter Inc. Struggles to Define Itself to Investors

However, the news is not entirely bad. Twitter beat Wall Street estimates during its last earnings report. The firm posted a loss of 19 cents per share when some analysts were expecting a loss of as much as 24 cents per share. Revenues also increased 61% year over year to $502 million.

That wasn’t good enough for investors, though. Even before the steep sell-off of the markets in general, investors seemed to doubt Twitter’s potential for growth. On the earnings conference call, CFO Anthony Noto said that user growth is likely to remain sluggish for a while. He also said that Twitter  has only penetrated 30% of the global market so far and acknowledged that the firm needs to increase its marketing efforts to expand its user base.

In fact, the rate of Twitter’s growth has been decelerating. At the end of the second quarter of 2015, the firm saw a 15% year over year growth in users. However, that’s down from 18% for the previous year.

Twitter is a social media site that allows people to post updates in 140 characters or less. In spite of the firm’s stock price woes, it’s one of the most popular sites in the world. The firm also owns Periscope, a platform that enables people to broadcast live events with their mobile devices.

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