Responding to efforts to cut down on fake accounts, as well as a slight drop in active users, Twitter’s stock price crumbled by just under 20% on Friday in early morning trading.
This drop occurred as Twitter beat analysts' second-quarter revenue and net income estimates -- revenue climbed 24% to $711 million, with net income at $134 million, up from $56 million.
In the second quarter, the social-media platform said it wound up losing 1 million active users to 335 million, versus the first quarter of this year (336 million). Twitter now has 267 million international users and 68 million U.S. users.
Year-over-year resulted in a different picture: Twitter was up 11% in its active user total.
The decline in users was somewhat expected. Over the last few days, executives said they would be purging around 1 million “fake” accounts, not part of its key “active-user” metric.
Twitter’s stock price was down nearly 19% on early Friday trading to $34.99.
Twitter’s advertising revenues -- accounting for 85% share of all its revenues -- grew 23% to $601 million. Data licensing and other revenue rose 29% to $109 million.
Analysts also point to Twitter’s drop as being attached to overall industry issues -- caught in a vortex of Facebook’s big 20% stock market decline the day before, which cited continued revenue growth slowdown.