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Investors Are Punishing Twitter For Suspending Accounts

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Investors Are Punishing Twitter For Suspending Accounts

In an effort to weed out the fakes and stop the spread of disinformation, Twitter Inc (NYSE: TWTR) management has more than doubled its account suspension rate since October of last year.

What Happened

The firm suspended more than 70 million accounts in May and June and was sustaining its pace in July, according to a Friday report by The Washington Post.

Why It’s Important

The honest effort to rid the platform of bots and trolls comes at a high price. Specifically, it's expected to drive a decline in the critical metric of monthly active users, which could be reflected in second-quarter figures.

Twitter’s vice president for trust and safety assured last week that the aggressive policing has not had “a ton of impact” on active-user numbers, but investors appeared unconvinced.

After a one-year run of 158 percent, during which Twitter capitalized on Facebook, Inc. (NASDAQ: FB)’s invasive user relationships, shares plummeted 8.3 percent Monday. Shareholder withdrawals were not redistributed to Twitter’s rivals; Snap Inc (NASDAQ: SNAP) and Facebook also trended down throughout the session.

What’s Next

Twitter management intends to continue its clean-up in the coming year and adjust its tactics to account for changing user approaches. The stock traded around $42.80 at time of publication.

Some clarifications: most accounts we remove are not included in our reported metrics as they have not been active on the platform for 30 days or more, or we catch them at sign up and they are never counted. https://t.co/nRIGE9EMcf

— Ned Segal (@nedsegal) July 9, 2018

Related Links:

Twitter Bull JPMorgan Projects 21% Upside For The Stock

Snap Vs. Twitter: Who Will Thrive In 2018?

 

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