As Twitter tries to rid itself of bots, trolls, and everything in between, there are real fears that it will end up costing the company dearly.
Between May and June of this year, Twitter is reported to have wiped out close to 70 million suspect accounts, according to a recent Washington Post report. That’s nearly 1 million accounts per day! But as the cleanup brings big results, it seems to be making investors very nervous as well. This is a serious issue, as this week’s 9% drop in share price demonstrates. The hit took $3.1 billion off Twitter’s market value.
The problem is not as complex as it may sound. Since Twitter confirmed that it had suspended those 70 million accounts, many suspect that this will hurt month active users in Q2 of this year. MAUs are a key performance metric for the platform. According to Fortune, Twitter’s share’s were downgraded to “Sell” from “Hold” following the confirmation, with CFRA analyst Scott Kessler explaining,
“Twitter had 336 million monthly active users in the first quarter. We wonder about potential negative impacts on pricing and revenue.”
In the grand scheme of things, 9% is not that much, as Twitter‘s shares gained 83% this year, and the company actually posted record profits. But Twitter has another big problem with fake accounts, scam bots, impersonators, trolls and more. Those will hurt the platform and the company’s profits much more in the long run, so it really needs to continue to work hard to clean up its act.
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