Twitter stock tumbles

Trading in Twitter stock was halted at Wall Street on Tuesday afternoon after financial data company Selerity leaked the firm's first-quarter results prematurely, before the market closed.

When trading resumed, the stock fell more than 25 percent before recovering slightly to end at $42.27 (38.5 euro) per share, down 18.2 percent.

The routing came amid a loss of $162 million for Twitter in the January-March period, significantly more than the shortfall of $132 million reported by the US social media firm in the first quarter last year.

Revenue was up 74 percent, however, rising to $436 million from $250 million a year ago. In addition, Twitter reported 302 million average monthly users, which were about 18 percent more, with some 80 percent of them accessing the site on mobile devices.

Nevertheless, investors sold the stock because of a less optimistic outlook for the whole of 2015. Twitter cut its revenue forecast to a maximum of $2.27 billion, down from its earlier forecast of $2.35 billion.

Overreactions

Twitter, which allows users to broadcast 140-character messages, attributed the dip in earning to weak interest in its new direct response ads, intended to encourage actions such as clicking on a link to an advertiser's website. Advertisers limited their spending and the click rate on Twitter's ads fell, the company said.

Investor concern about Twitter appears to have been exacerbated, however, due to the premature release of the first-quarter figures. Market data firm Selerity tweeted the result, saying it had found the release on Twitter's investor relations website. Twitter blamed the Nasdaq stock exchange, which it said managed its investor relations website.

Arvind Bhatia, an analyst with SterneAgee CRT told the news agency Reuters that the Twitter figures were looking "weaker than expected" causing the selloff.

"This sort of loss of momentum is probably going to cause a bigger outside reaction than in normal circumstances," he added.

uhe/pad (Reuters, AP, dpa)