Twitter Inc (NASDAQ: TWTR) Stock Leaps To New Heights

In the second quarter of the 2014 fiscal year, Twitter Inc (NASDAQ: TWTR) reported that its monthly active users rose to unexpected heights, by an incredible 24%. As a result, its shares rose nearly 30%.

The online messaging service has struggled to reverse a gradual decline in its once forward-rushing user growth pace. It saw its user base grow to 271 million, which is still a fraction of its rival, Facebook Inc (NASDAQ: FB)’s user count of 1.3 billion. Analysts from Wall Street had expected Twitter’s pace of growth to be around 21%.

Twitter uses a metric known as timeline views to measure the engagement of its users. It timeline view increased by 15 percent, which far exceeded the predicted 8%.

Twitter’s rapid mico blogging format has proven to be continuously popular as an real time way to promote major global events. For example, the micro blogging site was responsible for broadcasting real time scores during the FIFA World Cup. Products that were advertised during these broadcasts credited Twitter for boosting their company growth.

Dick Costolo, the chief executive officer of Twitter reaffirmed that Twitter remains focused on directing increased user engagement and growth. He stated that by developing new product experiences, such as the one that was centered on the World Cup, he believes that the company can extend its appeal to an even greater audience.

In Twitter’s second quarter report, its quarterly revenue soared 124 percent to $312 million, which beat out analysts’ forecasts for $283.1 million.

The company is currently maintaining its pace of attracting new users, after two quarters in a row of declining user growth. The decrease, which followed very closely behind the company’s initial public offering in November, riled concerns among investors that the company had outgrown its previous rapid sales growth. Costolo reacted by getting rid of Twitter’s executive team. He replaced his chief engineer, parted ways with his chief financial officer, and dismissed his operating chief.

According to Scott Kessler, as analyst at S&P Capital IQ, stated that all the observers have been too fixated on the metrics for user growth. Beyond the measurements, Twitter’s mobile advertising network has become more and more valuable and important to the company and to investors as time has gone on.

Since December 26^th of 2013, Twitter’s stock has dropped from a price of $73.31 by nearly 47 percent. This drop was due to allegations that Twitter’s growth rate is not fast enough to justify its inflated valuation. Now, the company is one of the most expensive in the technology sector based on predicted sales for the year 2014.