Tech

Twitter rebounds after CFO eases concerns about number of accounts taken down

Key Points
  • The Washington Post, citing an unnamed source, reported Twitter's unprecedented takedown rate could impact user metrics for the second quarter.
  • Twitter's dip makes for the stock's worst day since March 27 when it shed 12 percent.
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Twitter purges fake accounts as stock slides

Twitter is cleaning up its platform and taking down more fake accounts than ever, according to The Washington Post, but the stock still tanked on what appears to be concern around user growth.

The company's shares fell as much as 9.7 percent Monday, to a low of $42.08, after the Friday evening report that Twitter is suspending more than 1 million accounts a day. The newspaper, citing an unnamed source, reported the unprecedented takedown rate could impact user metrics for the second quarter.

Chief Financial Officer Ned Segal clarified in a tweet Monday "most accounts we remove are not included in our reported metrics as they have not been active on the platform for 30 days or more, or we catch them at sign up and they are never counted."

The company's stock pared some losses immediately following the tweets from Segal, rebounding above $44 and closing just 5 percent down at $44.10.

"In our view, there is some risk of reported user volatility due to fake and automated account removal in the near term, though the continued purge of fake accounts is clear progress for the longer-term health of the platform," analysts for Stifel wrote in a note Monday.

Twitter's dip makes for the stock's worst day since March 27 when it shed 12 percent. The shares are still up nearly 85 percent in 2018 and more than 140 percent in the past 12 months.

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The House that Jack Dorsey Built is dominating the market
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Tech Drivers

Jack Dorsey had a $700 million month

Key Points
  • Three years ago, Wall Street was highly skeptical of Dorsey's ability to be CEO of two companies.
  • Square and Twitter have had big years and both generated handsome returns for investors in May.
  • Dorsey's net worth jumped by more than $700 million in the month.