Twitter shares took a pounding Friday as a warning of a shrinking user base overshadowed news of a third straight quarterly profit. Twitter said it posted a profit of $100 million in the second quarter, following a loss of $116 million a year earlier, as revenue rose 24 percent to $711 million. But the San Francisco-based firm said its base of monthly active users fell by one million from the past quarter to 335 million in the period amid a purge of fake and abusive accounts and a crackdown on "bots" that manipulate the platform.
Twitter said it also expected user declines in the current quarter which would likely be in the "mid-single-digit millions." The drop in users comes from "prioritizing the health of the platform, and, to a lesser extent, GDPR," Twitter said, referring to Europe's General Data Protection Regulations that limit how internet firms can handle user data.
Shares in Twitter slumped as much as 20 percent in pre-opening trades in a market jittery following a weak outlook from social network leader Facebook, later paring the loss to around 12 percent. Chief executive Jack Dorsey said the results reflect investments "in the long-term health" of Twitter, noting efforts to weed out abusive and inappropriate behavior.