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Why Twitter Stock Plunged Today

By Joe Tenebruso - Apr 30, 2021 at 8:04PM

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The messaging platform failed to meet investors' lofty expectations.

What happened

Shares of Twitter (TWTR -2.42%) fell 15% on Friday, following the release of the social media network's first-quarter results. 

So what

Twitter's number of monetizable daily active users jumped 20% year over year to 199 million. Its revenue, in turn, rose 28% to $1.04 billion, fueled by a 32% increase in ad sales to $899 million. Growth was particularly strong in international markets, where Twitter's revenue surged 41%, to $480 million.

"Advertisers continue to benefit from updated ad formats, improved measurement, and new brand safety controls," Chief Financial Officer Ned Segal said in a press release.

A person is pointing to a stock chart that rises sharply and then falls.

Twitter's stock price pulled back on Friday, despite posting solid growth metrics. Image source: Getty Images.

Twitter's profitability also improved during the quarter. It generated an operating profit of $52 million, compared with a loss of $7 million in the year-ago period.

Now what 

Investors, however, appeared to focus more on Twitter's guidance. Management forecast second-quarter revenue of $980 million to $1.08 billion. The midpoint of that range was slightly below Wall Street's expectations of $1.06 billion. 

Twitter's shortfall comes after fellow social media giant Facebook delivered blockbuster first-quarter results. That made for difficult comparisons, and investors' expectations for Twitter may have simply been too high.

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