*By Michael Teich*
It's "mind-boggling" that Wall Street didn't foresee the decline of Twitter's user base, said Pivotal Research analyst Brian Wieser.
"This has been more than telegraphed," and the "stock was widely overvalued" going into earnings, he added.
Twitter shares plunged after the company reported 335 million monthly active users, 1 million fewer than the company had in the previous quarter. Twitter attributed the decline to its efforts to clean up the platform and purge spam accounts as well as the impact of GDPR, the new European Union law on data protection and privacy.
In its shareholder letter, Twitter said it expects a third-quarter decline of "mid-single-digit millions of monthly active users."
Although Wieser has a "sell" rating on Twitter stock, he thinks there were some positives that emerged from the quarterly report. He said that investors are overvaluing the importance of monthly active users.
"Monthly active users are irrelevant commercially," he said. "Advertisers are the ones spending money, not users."
By the same token, advertisers were seemingly unfazed by the drop in MAUs. Twitter's ad revenue grew 23 percent to $601 million in the second quarter. Overall revenue of $711 million topped estimates of $696.2 million, and earnings per share were in line with expectations.
Wieser is optimistic about Twitter's efforts to kill the spam and fake accounts plaguing the platform. Twitter suspended more than 70 million accounts in May and June, but Twitter CFO Ned Segal said most of them were not included in the company's reported metrics.
For full interview, [click here] (https://cms.cheddar.com/videos/VmlkZW8tMjEyNDg=).
Rite Aid has been banned from using facial recognition technology for five years over allegations that a surveillance system it used incorrectly identified potential shoplifters, especially Black, Latino, Asian or female shoppers.
The union representing Southwest Airlines pilots says it reached a new contract agreement in principle with the airline following three years of negotiations.
U.S. Bank has been hit with a $36 million fine for freezing debit cards that distributed unemployment benefits during the pandemic.
Construction of new homes rose by double digits in November, according to data from the Commerce Department.
Cheddar News' Need2Know is brought to you by Securitize, which helps unlock broader access to alternative investments in private businesses, funds, and other alternative assets. The private credit boom is here and the Hamilton Lane Senior Credit Opportunities Fund has tripled in assets under management in just six months from November 2022 through April this year. Visit Securitize.io to learn more.
Stocks opened lower after the opening bell and on track for its first decline in 10 days after a recent winning streak.
Tesla drivers in the U.S. were in more accidents than drivers of any other car brand this year, according to a study.
The promise of self-checkout was alluring: Customers could avoid long lines by scanning and bagging their own items, workers could be freed of doing those monotonous tasks themselves and retailers could save on labor costs.
Monsanto was ordered to pay $857 million to students and parent volunteers at a Washington school.
A federal judge has struck down hundreds of lawsuits filed against the makers of Tylenol and generic acetaminophen.
