Global Markets

Twitter blames ad targeting problems for plummet in shares

Twitter´s shares have recently suffered after the social media giant secured a high amount of new registrations, but struggled to sell advertising marketing to them.

Daily users of the social media platform increased to 145 million, beating analyst estimates for 141 million, up 17 per cent year-on-year.

The company´s profits for Q3 came in at $37million, however, this was less than a quarter of what analysts predicted. Following the announcement, Twitter shares fell by nearly 21 per cent, erasing almost half of the stock´s gains this year.

Profits were 9 per cent higher year-on-year at $824m, but this was still at the lower end of Wall Street forecasts.  Speculated attributions for this are product bugs and unusually low demand over the summer which hindered advertising sales.

The unexpected product bugs had impacted on the site´s ability to target ads and share data.

Twitter had predicted revenue to fall in the first two quarters, but the previously stated issues caused profit decreases to be prolonged. Fourth-quarter predictions have also been lowered and the company now expects to earn between $940m and $1.02b; down from a previously forecast $1.06bn.

Amid these setbacks, Twitter´s chief executive, Jack Dorsey, said the company was going to focus on making improvements to the platform´s algorithm.