Shares of Twitter dropped about 24 percent Thursday—a paper loss of $8.7 billion—after it reported sluggish user growth. The selloff was a sign that the social network will have a tough time regaining its stature with advertisers, at least until it releases better numbers, a senior tech analyst told CNBC.
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"To us, when you're talking about opportunities relative to communicating with advertisers, you want to lead with a large and growing and increasingly engaged user base," Scott Kessler of S&P Capital IQ told "Squawk on the Street." "And Twitter doesn't seem to have the data to support that proposition."
Twitter closed Wednesday's trading session at $65.97 a share before posting earnings after the bell, the first quarterly report since it went public in November. Shares reached a low of $50 during trading Thursday, on pace for Twitter's worst day on record. The formerly red-hot stock had zero room for error, said Colin Sebastian, a senior research analyst at Robert W. Baird & Co.
Despite a rocky trading session Thursday, Twitter's stock remained up 99 percent from its IPO price of $26 a share.