Can Twitter Stock Bounce Back After Last Week's 17% Drop?

Sometimes it's hard to live to up the hype of a turnaround. Shares of Twitter (NYSE: TWTR) began the week trading at their highest level since late last year, but it was a different story by the time the company posted second-quarter results on Thursday. Twitter's financial performance was a disappointment, sending the shares 16.7% lower on the week.

Revenue clocked in at $574 million for the quarter, declining 5% since the same period a year earlier. User growth and engagement trends remain positive, but Twitter continues to be challenged in its ability to monetize its traffic. Adjusted profit declined to $0.08 a share, but Wall Street was settling for tweaked earnings of just $0.05 a share on $536.6 million.

You don't often see stocks take double-digit percentage hits on better-than-expected results at both ends of the income statement. Twitter's slide was mostly the result of slowing user growth and uninspiring guidance for the rest of the year. The social-media giant closed out the quarter with 328 million monthly active users, sequentially flat with the first quarter's audience and a modest 5% uptick over the past year. Daily active users are growing faster than that, but until Twitter solves its monetization issues, the financial results aren't likely to impress.

Source: Fool.com