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Twitter Stock Falls 13% after 3Q15 Earnings Release

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Weak revenue guidance for fourth quarter

As we saw in the previous part of this series, Twitter (TWTR) announced its 3Q15 earnings on Tuesday, October 27, 2015. The social media company’s stock fell 13% to $27.20 after the earnings release.

Twitter’s share price fell due to flatlined user growth and weak revenue guidance for the fourth quarter of 2015. Twitter stock had risen sharply after the announcement of Jack Dorsey as the company’s new CEO (chief executive officer).

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After his appointment as CEO, Dorsey announced the first massive layoff in the company’s nine-year history. The main reason for reducing the workforce was to restructure the company and shift focus primarily to its products. The layoff will impact the structure of the organization. The first division to be impacted will be the engineering team.

In September, Twitter announced plans to diversify its workforce and focus on women and minorities. Twitter’s workforce is now primarily white and male, with women representing about 34% of its workforce and about 13% of tech (technical) jobs.

Recently, technology companies have been scrutinized for low diversity. Technology companies such as Pinterest and Twitter are now working to improve the issue. Others such as Facebook (FB), Amazon (AMZN), and Google (GOOG) started releasing workforce data last year.

Facebook and Twitter are part of the Vanguard Information Technology ETF (VGT). They account for 4.0% and 0.31% of the ETF, respectively.

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