Twitter Inc. (NYSE:TWTR) stock has plunged 39% over a three-month period as of close on October 8.
Shares built huge momentum into the early summer and Twitter reported profitability for the first time in its history. Unfortunately, in the second quarter the company saw its monthly active users (MAUs) fall to 335 million compared to 338.5 million in the prior year. Twitter purged over 70 million inactive accounts which were not counted as MAUs, but so-called "fake" accounts which were purged in the summer will be counted and could hurt MAU numbers in the third quarter.
Facebook Inc. (NASDAQ:FB) stock is also down 22% over the past three months. Shares are down 10.8% in 2018 so far. In the second quarter Facebook stock plunged as there was significant bearish sentiment following Europe’s new General Data Protection Regulations, or GDPR. These regulations and other consumer data privacy initiatives are expected to have a negative impact on Facebook revenues going forward.
Both companies have come under fire from the media and politicians following the 2016 U.S. election. The spotlight will be on social media companies once again in the November mid-terms, which will generate a lot of interest over the coming weeks. Investors may want to steer clear of both as the third quarter could bring more bad news. Twitter is projecting a further year-over-year drop in MAUs while Facebook revenue growth has slowed to a two-year low in Q2.
Tech Insider
