Why Twitter Got Crushed Yesterday

Despite delivering a beat in its earnings report both in revenue and adjusted earnings per share, Twitter (NYSE: TWTR  ) shares fell off a cliff yesterday, down by 24%. In this video from Friday's edition of Tech Teardown, Motley Fool tech and telecom analyst Evan Niu discusses Twitter and its biggest problems: user growth, and user engagement.

The investing narrative for Twitter bulls has been the idea that this company is growing extremely rapidly, and could potentially even catch Facebook (NASDAQ: FB  ) one day in terms of the number of users it has and, therefore, the number of eyes advertisers could reach through the platform. But with only 9 million new monthly active users this quarter, bumping the total number up to 241 million vs. Facebook's 1.2 billion, investors are concerned that the company is hitting a ceiling here. Twitter also released some concerning data regarding its user engagement, with timeline views per user down to a six-quarter low.

In the video, Evan explores why, like the early days of Facebook's reporting when it discussed "like" metrics, Twitters reporting approach of timeline views per user might one day be replaced by more meaningful metrics; but he also looks at why Twitter may not have as much mainstream appeal as Facebook does, and what, if anything, the company can do to change that.

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