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article imageTwitter's stock price declines on fears of loss of active users

By Ken Hanly     Jul 9, 2018 in Internet
San Francisco - The recent decision by Twitter to suspend more than one million accounts per day caused fears that the number of monthly active users will fall. This has had a negative effect on the stock price which declined as much as 8.2 percent Monday morning.
A recent Digital Journal article reported the Washington Post as saying that over May and June Twitter had suspended 70 million accounts and some expressed concerns that the user base would be negatively impacted by the move even though many of the accounts were inactive. The suspensions were also often related to suspected malicious activity. The rate of suspensions has more than doubled that back in October of 2017.
Twitter stock still doing well this year
Jitendra Waray, intelligence analyst for Bloomberg said "the volume of fake account deletion, albeit good for longer term, raises uncertainty on near-term user growth expectations." However, the overall performance of Twitter stock this year is impressive. Even with the recent decline it is still up 83 percent on the year. Waray points out that in many cases there is low activity on the accounts deleted and therefore the effect on daily user growth should be weak.
Just last week the stock had risen 6.8 percent after a positive note by Peter Stabler of Wells Fargo that praised the company's recent success with video content and also noted there was improved monetization efficiency. Waral said that Twitter's "high valuation is expecting continued momentum in user growth and engagement that they have seen over the past several quarters."
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