Twitter results need to wow to reassure investors

Wed Feb 10, 2016 7:09am EST
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By Abhirup Roy and Supantha Mukherjee

(Reuters) - When Twitter Inc reports results on Wednesday, a less than stellar showing could hammer the stock further as a broad selloff in the technology sector has made investors jittery.

Twitter's shares have lost more than two-thirds of their value in the past 12 months and hit a record low of $14.32 on Tuesday. The shares were up about 2 percent at $14.70 in premarket trading on Wednesday.

Several tech stocks with lofty valuations have plunged in the past few days after dismal sales outlook from LinkedIn Corp and business-analytics company Tableau Software fueled growth fears for the entire sector.

"I think the problem is that in the current market any sign of a weak outlook will be quite harshly punished," Atlantic Equities analyst James Cordwell said.

Investors want to see Chief Executive Jack Dorsey's strategy to reignite growth in user numbers.

Twitter reported an 11 percent growth in active monthly users in the third quarter to 320 million, the slowest growth since the company went public in 2013.

But one effort, Moments, which showcases Twitter's best tweets and content, has failed to take off as expected, analysts have said.

Twitter is also planning to reorder tweets to prioritize those it believes more users will want to see, BuzzFeed reported on Friday.   Continued...

A 3D-printed logo for Twitter is seen in this picture illustration made in Zenica, Bosnia and Herzegovina on January 26, 2016. REUTERS/Dado Ruvic