Of all the business and investing news over the past week, the number two trending story for investors on social media was Twitter (NYSE:TWTR) absolutely tanking after releasing fourth-quarter earnings.
The bottom fell out of the stock to the tune of $8.7 billion in market cap in a single day of trading. And that's despite impressive revenues and earnings overall and on a per user basis. So what gives?
Investors in consumer facing, Internet media companies look to a lot more metrics than simply revenues, margins, and earnings. First among those is user growth, a metric that for Twitter was underwhelming at best and abhorrent at worst. For the first time, Twitter veered sharply off the established growth pattern established by other social media behemoths like Facebook (NASDAQ:FB) and LinkedIn (NYSE:LNKD.DL).
Facebook's Instagram, for example, saw double the user growth as Twitter from the second quarter to the fourth last year. And that's just the tip of the iceberg.
In the video below, Motley Fool contributor Jay Jenkins tells us the story and why this is a major red flag for Twitter investors. He also reveals the two other companies that have out innovated Twitter and are stealing users hand over fist (hint: one's the fastest growing international message service and the other's messages disappear after a short 10 seconds).
Jay Jenkins has no position in any stocks mentioned. The Motley Fool recommends Facebook, LinkedIn, and Twitter. The Motley Fool owns shares of Facebook and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.