Twitter Stock Drops as They Crack Down on More Fake Accounts
Twitter suspended a total of 70 million user accounts in the months of May and June, said CNN.
On Monday, Twitter stock fell by 9% at the most after the company heightened its amount of suspensions on fake accounts, reported CNN. Twitter suspended a total of 70 million user accounts in the months of May and June – representing more than one million accounts each day.
Ned Segal, the chief financial officer of Twitter, made clear that the removed accounts are those that have not been active in the past 30 days, and as a result, are not included in the company’s metrics of active members.
Segal tweeted “If we removed 70M accounts from our reported metrics, you would hear directly from us” noting that The Washington Post report “reflects us getting better at improving the health of the service.”
After Segal’s statement, Twitter stock bounced back a little. The overall stock scare is believed to come from issues like online privacy, fake news, and election interference – major problems within the tech industry.
Tech giants are in a “race to clean up their platforms and eliminate bad actors,” CNN said. “User growth is often the key focus point for Wall Street in evaluating the strength of social media platforms and their potential to grow ad dollars.”
Even though Twitter stock dropped quite a bit, analysts suggested that the decrease really isn’t that significant.
“The market is overreacting,” said Michael Pachter, an analyst for Wedbush, a private financial services and investment firm. “If active accounts were eliminated or suspended, the affected users would be more vocal.”
According to CNN, Twitter stock actually almost doubled during the year. Other analysts agree with Pachter, citing Wall Street’s quick responsiveness to changes that companies make.
“The Street is hyper sensitive to any speed bumps for Twitter as the stock has had a massive run over the last six months,” says Daniel Ives, chief strategy officer of GBH Insights.
“We see minimal financial impact as of now,” he added.
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