Twitter shares tumble below $26 initial public offering price
Twitter shares fell below their $26 initial public offering price on Thursday, less than a month after co-founder Jack Dorsey warned it would take a while before Twitter is able to reverse a slowdown in user growth.
Shares fell by as much as 6pc to $25.92 in late afternoon trading in New York amid a general market sell-off, before settling at $26 at the close. The company’s shares have almost halved over the past five months.
While Mr Dorsey’s candor was applauded by analysts, investors appear to have taken his comments — which also described product performance as “unacceptable” — to heart.
The board’s search for a new chief executive, and uncertainty over whether Mr Dorsey is in contention for the job, also have weighed on the social media giant’s shares.
Twitter faces the challenge of whether its 316m monthly users can become a mainstream platform instead of a niche forum favored by journalists and celebrities.
Last month, Mr Dorsey has said he wasn’t “satisfied” with the company’s user growth. Anthony Noto, the company’s chief operating officer warned that the company did not expect to see “sustained meaningful growth” until it reached a mass market audience, which he said would take a “considerable period of time”.
Mr Dorsey added: “We’ve got unbelievable brand awareness, but people are not clear why they should use it themselves.”
Further share declines could add pressure on Twitter to seek a takeover, or complete its search for a CEO. Mr Dorsey also runs Square, a mobile payments company.