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Why Twitter, Inc. Fell 10% in February

By Anders Bylund - Mar 3, 2017 at 8:05PM

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Triggered by a disappointing fourth-quarter report, this plunge was more fuel on a roaring fire of fundamental business troubles. Will the social network ever figure out how to make money without driving down its user counts?

What happened

Shares of Twitter (TWTR 1.89%) fell 10.5% in February 2017, according to data from S&P Global Market Intelligence.

So what

Essentially all of Twitter's February pain arrived on the 9th, following the company's fourth-quarter earnings report. The microblogging service's once-vibrant revenue growth slowed down to a 1% year-over-year gain, while bottom-line GAAP losses doubled.

A confusing set of street marking arrows.

Will Twitter ever find the right way forward? Image source: Getty Images.

Now what

Twitter shares have now lost 62% of their original IPO value, as the company has struggled to find a sustainable balance between making money and attracting users. As a social-media product, Twitter is undeniably good at what it does. As a money-making business, the company still has a lot to prove.

The best-case scenario for Twitter investors at this point might be a sale to some larger company that lacks a social-media component. That would unlock some value from the namesake service by marrying it to a greater cause. On its own, I don't see Twitter as a viable investment -- and even the buyout bids will probably wait for a lower buyout price.

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