Twitter Inc (NYSE:TWTR) has become the medium for ranting and making threats (then typically backtrack at a later date), but the nastier problem is TWTR stock.
In the two weeks since reporting its quarterly results, it’s literally and figuratively been all downhill for Twitter and, admittedly, much to this strategist’s chagrin.
I last wrote about TWTR stock on July 14. The article was a follow-up piece as it looked like the right time to stay on message. TWTR shares appeared (finally) ready to confirm a bullish trend change both off and on the price chart. Then came earnings.
Twitter announced a couple items demonstrating the company is making progress and continuing to execute well. Earnings of 12 cents topped Street views of 5 cents and revenues also beat forecasts. But in the immediate aftermath shares plunged by about 14%. And since the initial reaction, TWTR stock has continued to weaken by several percent.
So what went wrong? Twitter’s monthly average user growth seems to be the biggest source of concern with investors. The platform’s count of 328 million users was flat sequentially and missed forecasts.
The weaker-than-expected number wasn’t entirely a surprise. The reality is MAU only missed estimates by 1 million users or a minuscule .003%. Nevertheless, following an uptick and beat in MAU the prior quarter, user growth has been reaffirmed as a problem by investors tired of waiting for a turnaround in Twitter — and now one impacting another about-face on the TWTR stock chart.
TWTR Stock Daily Price Chart
Click to Enlarge When I last discussed TWTR, the technical picture was pointing strongly to an emerging uptrend on the heels of a massive downtrend and significant double-bottom pattern.
As illustrated on the provided daily chart, bulls winded up receiving confirmation of an uptrend a couple sessions later as shares broke out to new highs. And then came earnings and with it, investors very bearish reactive U-turn to the report.
In the here and now, additional weakness has resulted in Twitter breaking slightly below its prior channel test and a key low for the quickly broken uptrend. Aside from being disparaging, the failure may have longer-term bearish implications.