Twitter Is No WhatsApp: StockTwits

NEW YORK (TheStreet) -- Twitter ( TWTR) isn't on track to hit the billion user tipping point. That was the verdict on StockTwits.com after the micro-blogging social network's first-quarter earnings announcement Tuesday evening.

Difference between a "niche medium" & its grander counterpart will be interesting to learn in months ahead http://stks.co/h0YTb $TWTR $FB

? Dan Ramsden (@d_ramsden) Apr. 30 at 07:28 AM
The stock opened more than 11% lower Wednesday. Twitter's financials couldn't be blamed for the fall. Excluding some items such as stock-based compensation, Twitter reported a break-even quarter on $250 million in sales. That beat analysts' calls for a loss of 3 cents per share on $241 million in revenue.

User growth, however, disappointed. The number of monthly active users increased 25% year-over-year. Last quarter, that number increased 30% compared to the fourth quarter of 2012.

$TWTR after last ER TWTR collapsed 25% in one day. And their user slowdown wasn't THAT bad like this ER. Hmm...

? Alex Cusack (@accounts) Apr. 30 at 08:41 AM
Sequentially, the number of monthly active users grew 5.8% to 255 million. That growth is relatively anemic compared to, say, WhatsApp, the messenger service Facebook ( FBacquired for $19 billion earlier this year. WhatsApp has 450 million users and is adding them at the rate of one million per day.

As of the open, Twitter had a $24 billion market cap. It trades at nearly 194 time expected 2015 earnings. On Wednesday, many investors doubted Twitter would enjoy such high multiples for long. About 49% of users anticipated further declines, according to StockTwits' analytics. The stock has already declined nearly 50% from its 52-week high.

$TWTR The results from the ER aren't really surprising. Growth is anemic and the monetization strategy they have in place is unworkable.

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