In this segment from Motley Fool Money, host Chris Hill chats with analysts Matt Argersinger, David Kretzmann, and Aaron Bush about the market's illogical response to Twitter's (NYSE:TWTR) second-quarter report.

Monthly active users were down -- expected, since the company is in the midst of rooting out millions of fake accounts -- but daily active users were up, revenue was up, and profits were present. Even more importantly, it's getting traction with advertisers, and Facebook's (NASDAQ:FB) problems give it -- and others in the online ad space -- opportunities to gather more momentum.

A full transcript follows the video.

This video was recorded on July 27, 2018.

Chris Hill: Earlier this summer, Twitter announced it is purging its platform of fake accounts. On Friday, Twitter's stock purged itself of nearly 20% of its value. Their profit for the second quarter, it was there, Matty, but their monthly active users are down.

Matt Argersinger: That's right. It's another story where I think we should have expected this. We were going to see this, and we knew it. And when the news finally hit, it was like, buy on the rumor, sell on the news. The news came out, and investors sold the stock.

But, again, with monthly active users down a million, and of course, they guided for a few million more lost in the coming quarters, I don't think that's the metric that the market or investors should be focusing on. For one, daily active users -- we know Twitter is much more a real-time platform, people are going there for the news as it's happening, sports as it's happening, culture as it's happening -- that number was up 11%. That's pretty strong. Then, you mentioned the earnings. Revenue was up 24%. We expected to see that Twitter was finally getting traction with their advertisers, and that's happening. We're not going to call Facebook fallout, but I do feel like, there might be a shift going on, that advertisers are looking for other platforms, and Twitter should be a beneficiary.

Hill: I'm glad you mentioned that, because it really does seem, less so with Twitter and more because Facebook, we've started to see some reports here and there of advertisers moving their digital dollars away from Facebook in the last couple of months, onto other platforms. Doesn't it really seem like the table is set right now for other companies? I'm thinking mainly of Snap, but really, any business that's trying to make a big push into digital advertising. If you have media buyers who are now hedging a little bit or pulling back some of that spend with Facebook ... Aaron, if Snap can't get it done in the next six months, it's time for them to fold up the tent and go home.

Aaron Bush: I tend to agree with that. Snap has not been very impressive at all, and I do not have confidence that they actually will take this opportunity and do a good job with it. But, I mean, there are so many other big players out there. YouTube could easily steal a lot of that. They've had some issues of their own, but they seem to be on fire, too. If others fall, they could hit it big. We'll see.

David Kretzmann: To give Jack Dorsey credit, Twitter's cash flow situation has dramatically improved the past couple of years. It produced $1 billion in operating cash flow over the past year. The company is sitting tight with about $3 billion in net cash. From a cash perspective, the business is as strong as it's ever been.

Aaron Bush owns shares of Facebook and Twitter. Chris Hill has no position in any of the stocks mentioned. David Kretzmann owns shares of Facebook and Twitter. Matthew Argersinger owns shares of Twitter and has the following options: long January 2019 $15 calls on Twitter. The Motley Fool owns shares of and recommends Facebook and Twitter. The Motley Fool has a disclosure policy.