Twitter shares jump ahead of results

Shares in Twitter rose 5pc ahead of their results on Tuesday evening, as investors gained confidence that the social network would narrow its losses and escape becoming another dotcom disaster.

The San Francisco business, which allows people to post messages 140 characters at a time, was expected to report a pre-tax loss of $14.3m for the first quarter, down from nearly $515m in the previous three months.

Meanwhile, analysts predicted that revenues would remain broadly flat on the previous quarter, at $241.5m, according to consensus estimates compiled by Bloomberg.

However, the real focus of attention was the speed at which Twitter is managing to increase its user base. On Tuesday, its shares rose to around $43 in late afternoon trading in New York, handing the company a valuation of $24.2bn, as investors bet that it would have regained some of its lost momentum.

The social network made a dazzling stock market debut last November, when its value soared from $14bn to nearly $40bn in December. However, that figure tumbled after its first set of results in February, when the company revealed a dramatic slowdown in user growth.

The number of people signed up to the social network rose just 30pc, in the fourth quarter in 2013, compared with 39pc in the same period the previous year.

At the time, Dick Costelo, Twitter’s chief executive, promised investors that the company would “double down” to expand its audience this year.

The slowdown stoked fears that Twitter will struggle to increase its revenues as rapidly as hoped, and that the service has been overvalued, in line with a fresh doctom bubble.

Others feared that Twitter could fall out of favour altogether, echoing the decline of social networks like MySpace and Bebo before it.

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