Twitter Inc (NYSE:TWTR) has been purging malicious and fake accounts for some time to make sure that it is welcoming real people as users on its platform. However, when a media post reported that the social media giant has deleted over 70 million accounts in last two months, the shares of the company plummeted by 9% erasing its market value by $3 billion.
Twitter stocks recover slightly after Segal’s comments
The huge number of deletion of user accounts scared the investors who thought that the removals could possibly affect the user figures of the company. In the first quarter of this year, Twitter had a monthly user base of 336 million. However, the Chief Financial Officer of the San Francisco-based company, Ned Segal said that most of the accounts that were removed have not been active for a month or even more. Hence he said that these cannot be counted in the monthly user number of Twitter. Post the comment from Segal the stock of Twitter recovered slightly.
Segel tweeted that the company would directly give the information if they ever remove 70 million accounts. The company has been facing a big problem trying to overcome the issues posed by fake accounts. Recently, Twitter admitted that around 50,000 Russian bots were involved in the movement that influenced the 2016 US elections was won by Donald Trump. That is why; the company is now trying to purge bots, impersonators, and trolls.
Will the removal of 70 M users affect Twitter’s value?
According to Scott Kessler, a CFRA analyst, “Twitter had 336 million monthly active users in the first quarter. We wonder about potential negative impacts on pricing and revenue.” After the news, Kessler downgraded the Twitter’s shares from Hold to Sell. The company’s shares have gained 83% in 2018 and registered record profit in the second quarter of this year. But fake account issues and scammers have been dogging Twitter.
Most probably, it will be difficult for the social networking giant to recover quickly now that the news about removing 70 million users have become viral.