Twitter “Makes More Money Than Expected” But Still Loses $3B in Value
Buzzfeed has a fascinating article on Twitter’s third-quarter earnings, relevant both for the points it makes and one big thing it leaves out.
First: Twitter exceeded expectations, by which it met expectations, by which it lost value:
Twitter about met expectations set by investors for its growing user numbers, making slightly more money than expected — but that wasn’t enough for Wall Street, sending the stock down about 10% and erasing about $3 billion in value for the company.
Even Twitter can’t escape the curse of “meets expectations.”
We can feel a little better by saying to ourselves “it’s value, not money; like our index funds or 401(k)s, Twitter’s value number will go up and down but will only become real the day it is distributed at age 59 1/2 or whatever the equivalent is for Twitter.” But a $3 billion loss, even with semi-illusory “value” money, still hurts. I wouldn’t like to be told that I was $3 billion less valuable than I was three months ago.
And then we get to the reason why Twitter’s growth might only have “met” expectations:
Without a major event like the World Cup, Twitter wasn’t able to continue dramatically boosting its user base, suggesting that it needs flagship events like that to juice its numbers.
Huh, guess there weren’t any major events on Twitter in the past three months.
As sad as I am to assume that #Ferguson probably did not boost Twitter’s user base all that much (the people in the conversation were already active Twitter users, I’m guessing), I’m astonished—and delighted—that #Gamergate got nary a mention in the report. All the new egg avatars, each representing one more person making an account to argue that it’s about ethics in gaming journalism, didn’t even flutter the scales.
I’m also saddened to learn that it takes a sportsball event to boost Twitter’s numbers and value, but such is the way of sportsball.
Even though the company has been touting user activity around events like NFL games, it hasn’t quite hit the highs that it achieved during the World Cup over the summer.
Okay, Twitter. Here’s the deal. I want you to earn that $3B back, so when the Super Bowl comes around in—quickly googles “when is Super Bowl 2015”—February, I will make all the worst, overused jokes about the Superb Owl so I can help you boost your user activity. In return, you have to stay awesome and remain a space where we can have asychronous conversations with groups of friends and fight for social justice.
Photo credit: Daniel Rothamel (cropped, and yes, that is a Fail Whale jack-o’-lantern)