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Twitter Stock Plunges 21 Percent After Earnings Show Effects of Fake-Account Purge (marketwatch.com) 126

Posted by BeauHD from the cause-and-effect dept.
Twitter shares fell 21% on Friday as the company reported that user growth had turned negative, even as its quarterly results beat Wall Street expectations. The decline was even greater than Facebook's almost 19 percent plunge in shares after the social media giant reported disappointing results. MarketWatch reports: Twitter posted a profit for the third consecutive quarter, with its $134 million in net income equating to 13 cents a share. Adjusted per-share earnings came to 17 cents. The FactSet consensus estimate had been 16 cents. Twitter's revenue climbed 24% to $710.5 million to beat the FactSet consensus estimate by about $2 million. Even as executives talked about Twitter's bright future on the earnings calls, investors appeared to react to Twitter's slowing user growth, as its monthly user count went south, falling by 1 million to 355 million, as compared with the year's first quarter. The decline was expected after recent reports had the company purging about a million fake accounts a day.
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Twitter Stock Plunges 21 Percent After Earnings Show Effects of Fake-Account Purge More

Twitter Stock Plunges 21 Percent After Earnings Show Effects of Fake-Account Purge

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  • Meh (Score:1)

    by Sejus ( 2109992 )
    Never tweeted a tweet, never really saw the benefit, followed Mark Rusonavitch (sp) for a minute, maybe im just not that exciting...

  • Anyone remember when I said they were at least 30% bots and when the world finds out the shareholders all take a bath?

  • It's about time (Score:5, Interesting)

    by timholman ( 71886 ) on Friday July 27, 2018 @07:25PM (#57021860)

    Using Twitter is like playing Russian Roulette. Every time you tweet, you pull the trigger. Most of the time, nothing happens, but sooner or later you'll get unlucky and the Internet mob will destroy you for what you tweeted (latest case in point: James Gunn).

    Maybe, just maybe, people are finally beginning to realize just how toxic Twitter really is. It only took a few thousand ruined lives and careers to get the point across.

    • Just so we're clear (Score:5, Insightful)

      by raymorris ( 2726007 ) on Friday July 27, 2018 @07:57PM (#57021988) Journal

      > Using Twitter is like playing Russian Roulette. Every time you tweet, you pull the trigger.
      > case in point: James Gunn

      So what you're saying is every time you talk, things like this might spill out of your mouth?:

      "I like when little boys touch me in my silly place."
      -- James Gunn

      "The best thing about being raped is when youâ(TM)re done being raped and itâ(TM)s like 'whew this feels great, not being raped!'"
      -- James Gunn

      "walked over a table to one of the kid actors on set, looked at the kid, and started masturbating right at him. ... A string of semen shot out of the mini-monkey-wood and splash-landed DIRECTLY ON THE KID.
      Screaming and freaking out commenced.
      I know it might be sick, but that story makes me extremely happy."
      -- James Gunn

      "Watching Trapped in the Closet, R Kellyâ(TM)s second best video after the one where he urinates on a child.â
      -- James Gunn

      If these are the kinds of things you might randomly say, your Russian roulette, please - get help.

      • Oh come on, the last 2 are actually funny for anyone without the giant stick of political correctness up their ass*. (Why'd you omit the context of the 3rd, that it was a monkey, not human, who did it). The first two, not so much, but were clearly an attempt at provocative humor, and that hardly rises to the level of completely destroying your career and reputation.

        * - Has 'stick up your ass' now morphed into a lynchable offense?**

        ** - Oh shit has that?

      • If these are the kinds of things you might randomly say, your Russian roulette, please - get help.

        This is the kind of thing someone would say not at all understanding the entertainment industry or the human brain. But let's point out two things in isolation:

        a) James Gunn was a filmmaker whose art 10+ years ago relied heavily on shock humour. To get recognised you need to make your mark in people's minds. Blow their minds, shock their minds, make them think you're incredibly stupid, whatever. You need to do something that gets you noticed and usually that something will be in line with your general artis

        • > People develop, people change. Maybe he did get help?

          Maybe he did, and refused to acknowledge that to Disney executives. Or maybe his interest in child molestation has developed in the way things normally develop. In general, things tend to develop further, whatever something does, it tends to develop to do more so. Small trees become larger trees, they don't generally become carrots. A leaning fence tends tends to lean further until it falls, it doesn't tend to right itself.

          I'm not going to put him in

      • Comment removed based on user account deletion

      • So what you're saying is every time you talk, things like this might spill out of your mouth?

        No, that's you projecting that because I pointed out that James Gunn destroyed his life and career by using Twitter, that somehow I am okay with pedophilia and rape. That says a great deal more about you than it does about me, or James Gunn.

        What Gunn tweeted years ago was tasteless, provocative shock humor (to him, at least). But because he used Twitter to do it, and he put it out for the world to see, and because

        • You're free to hire him to run your projects, directing your people.

          As for me, I won't be putting someone who constantly talks about the joy of child molestation in charge of *my* people. O care enough about the people in my sphere of influence that I wouldn't subject them to whatever this sicko may do next. You can, though. Do expect to be sued when he continues to be a sick bastard, because you knew about it when you hired him and put him in a position to hurt others.

    • I have a Twitter account where I just post technical info, zero politics. I don't follow political people and even some technical people I follow I have to mute from time to time.

      It is possible to run a Twitter account that is pure utility and friendly vibes, where there's really nothing that anyone can gain much traction on.

      Mobs on Twitter are inherently a stupid thing anyway. You can just take a break from Twitter and most of the people will be gone, blocking the handful of losers that remain. Then jus

      • Re: (Score:3)

        by Mashiki ( 184564 )

        One of the companies I worked for a few years ago did something similar to this. Guess what happened? That mob you're talking about, they went out of their way to get the guy who operated it fired because he refused to play the political game and simply muted them.

        Seriously, Twitter is the equivalent of pig sty loaded with ebola and leprosy. If someone is so determined to ruin your life, the little self-offend-o-trons will go out of their way to try and ruin it. It's simply easier on twitter because comp

    • Re: (Score:2)

      by novakyu ( 636495 )

      I started keeping a personal data retention rule on Twitter for this reason. 2 years—that's the maximum length of lifetime I am willing to allow on my tweets. Every New Year's, I'll delete every tweet that is more than 1 year old. I am willing to be held responsible for what I tweeted in the last year. But if somebody wants to dig up older tweets, they're going to have to maintain their own archive.

      • Re: (Score:1)

        by Anonymous Coward

        Dude, I'm sure all tweets are archived by some bot somewhere. People get in deep shit for deleted tweets all the time. Unless you're retired or independently wealthy, using twitter is insanity. Every tweet risks your solvency.

        • Re: (Score:2)

          by novakyu ( 636495 )

          Tweeting is like speeding. The first step in defense is obscurity. The second step in defense is not being so obvious about it.

    • Re: (Score:1)

      by Anonymous Coward

      You reap what you sow. Twitter used to be what it truly is... a place full of irrelevant bullshit that you can have fun in.

      Then the Left arrived

      Politicised it

      Took it over

      Twitter, being full of smug and self-satisfied liberals, didn't care. Proclaimed itself the free speech wing of the free speech party - while ignoring the rancid outrage mobs that were developing on their platform. There people were determined to ruin the lives of anyone they disagreed with and could find their real identities.

      Then... the s

    • Comment removed based on user account deletion

  • Fantasy cage match: Network Effects v Market Cap (Score:4, Interesting)

    by shanen ( 462549 ) on Friday July 27, 2018 @07:28PM (#57021874) Homepage Journal

    What's interesting me about this news, also extended to Facebook, is the interplay between the corporate value that's actually based on network effects versus the delusional stock prices that drive the market cap. To review, the idea of network effects is that more users of the network increase the value of the network, often more than linearly. However, what happens when lots of the users become fake identities that are not actually contributing any real value? The tiny bit of the stock price that is related to actual value (rather than gambling machines battling to the death) is going to have to adjust when the network appears to shrink.

    From a fundamental level (as if anyone cared anymore relative to technical speculation), I don't see any value in Twitter from the git go.

    • To review, the idea of network effects is that more users of the network increase the value of the network, often more than linearly.

      Nitpick, it must be more than linear. But yes, exponential increases are usually considered. To those who wonder why Microsoft is still so valuable, it's network effects. And there, unlike social media, the costs to getting everyone to switch are almost impossible.

      I could see some value in Twitter, but I couldn't (and still don't) see a way for them to retain any of that v

      • Re: (Score:2)

        by shanen ( 462549 )

        Er... Just so, and thanks for pointing out my mistake. Would you believe that some of my best friends are real mathematicians.

        However, as it applies to the story, the question is how much the stock price should fluctuate in response to shrinkage of the network when fake identities are removed. If the opinion of the correct stock price was based on the imagined value of a network of 100 million identities, and you remove 20 million fake identities, then what is the new imaginary stock price?

        My main point sho

  • Translation of Wall Street (Score:1)

    by Anonymous Coward

    We would rather have lies of large numbers that look good on the surface than evidence of truthful and honest conduct to rehabilitate falsehoods.

  • Just interesting, half of the accounts were probably made from this. tweetattackspro.com

  • Good keep going (Score:3)

    by ArchieBunker ( 132337 ) on Friday July 27, 2018 @07:45PM (#57021942)

    It does nothing positive for society.

  • And this is the result of so-called "investment" (Score:5, Informative)

    by Puls4r ( 724907 ) on Friday July 27, 2018 @08:46PM (#57022164)
    The average person the street is not smart enough to understand that "investors" have not a damn thing to do with real performance. They'll see this and think that somehow twitter is not a profitable or sustaining company, despite the fact that their profits are good.

    What we have is irresponsible profit-driven reporters who want short clips rather than explaining what this actually means.

    And in the mean time, we have a bunch of idiots who are so absorbed with another idiots that all they want to do is talk politics and trash talk eachother.

    This easily could have been titled "Childish investors with no foresight have knee-jerk reaction to something that was already predicted." Or perhaps "Company does the right thing, angers investors."

    Stock price no longer has any real tie in with the success or failure of companies. It's just a ticker number that people who participate in real-life gambling pay attention to.

  • Just wait for Tesla (Score:1)

    by Anonymous Coward

    When I saw the massive $FB drop (which seemed unwarranted, IMO) it was clear a lot of future growth was baked in. Same with twitter. Tesla has their earnings call Wednesday. They're a $50-60 billion dollar company - bigger than Ford, sometimes bigger than GM. I don't know what's been baked in [1], but they look more like a $5 billion dollar company. And act like a $5 million dollar company. Expect them to pop big time.

    1. Tesla hypesters insist they're also an energy company. Look at the P/E for Solar

  • I'm not sure why this comes as a surprise ? (Score:4, Insightful)

    by nehumanuscrede ( 624750 ) on Friday July 27, 2018 @08:55PM (#57022198)

    Twitter had an exaggerated user base which inflated stock because more users = great company.

    Twitter wipes out a significant amount of fake accounts and the stock plummets.
    ( Company not quite as amazing as they pretended it was )

    Pretty sure that's how this is supposed to work ?

    • Re: (Score:2)

      by jon3k ( 691256 )
      I agree with you. And what concerns me now is, what social media company in the world would go out of their way to delete fake accounts now? The stock market is telling you exactly what the results will be if you try and clean up your platform.

  • Hmmm (Score:2)

    by msauve ( 701917 )
    So, this news is about fake accounts.

    Does that make it "real fake news?"

  • From what I've seen, a lot of the bots were way more valuable than most people on Twitter.

  • Censorship always fails.
    Any 3rd world nation can report, ban, block, shadow ban, censor.
    Bring back some US free speech and make the internet great again.
  • Iâ(TM)d be surprised if less than 10% of the accounts were fake. I live in Japan, which I *think* has one of the highest percent of users. The people I know who use it donâ(TM)t engage in any kind of social or political debate though. They post and look at pics of food and celebrity bs.

    • Re: (Score:1)

      by Anonymous Coward

      If you read carefully you will see that it's one million per day.
      The real story is that even when purging a million accounts per day, their total user base only declined by 1 million this month.

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