A Bad Year For Twitter Investors

Almost one year ago, on December 26, things were all smiles for Twitter’s investors. Twitter’s stock had just closed at an all-time high of $73.31 and those who had invested in the company’s IPO 6 weeks earlier, had almost tripled their investment. Than, 2014 happened.

The year started off badly when Twitter reported disappointing user growth in its first earnings report as a public company. The company’s share price immediately dropped by 24% and continued to slide until June, when the momentum turned back in Twitter’s favor in anticipation of the FIFA World Cup, which turned out to be a huge success for Twitter. Twitter’s stock subsequently climbed backed up before the company’s third quarter earnings report once again spurred fears about the network’s limited growth potential. Shares began tumbling again and are now down almost 50% since January.

Adding insult to injury, Facebook, the company that Twitter can’t help being measured against, is having a pretty good year. Facebook’s mobile ad business is flourishing and Instagram, the photo sharing network Facebook acquired for $1 billion in 2012, is not only the preferred social network among teenagers but also bigger than Twitter in terms of user count. Facebook’s shares are up almost 40% since the beginning of the year.