Victor Anthony: Twitter Investors Are Losing Confidence

Twitter Inc (NYSE: TWTR) reported better-than-expected second quarter numbers on Tuesday with revenues up 61 percent year-over-year. However, shares of the company took a beating when markets opened for trade.

Victor Anthony, Axiom Capital Management analyst, was on CNBC to explain the reason behind that slump.

Lack Of User Growth + Decline

"Investors are punishing the stock clearly for a lack of user growth and the second thing also engagement declined from last year, so that's an issue," Anthony began. "And he [Jack Dorsey] also talked about all this different product launches and iterations that they announced and talked about in the analyst call in November. So you're seeing nine months later they talked about those product launches failed to drive user growth and so that's a big issue."

Project Lightning

Anthony was asked if Twitter's new feature dubbed Project Lightning will help in driving user growth. He replied, "Well the thing is I mean confidence in that working is no longer there and that's probably why you're seeing the reaction in the aftermarket which, I think is a little bit overdone by the way. And so investors I think are losing confidence."

"We were told in November that all of these different product iterations would have led to user growth. Now, maybe Project Lightning will work. They talked about possibly doing a marketing campaign in the fourth quarter to get to drive the user growth over the next several months. We'll see when that works, you just have to wait and see."

Anthony also remarked that he doesn't think that Jack Dorsey is the best candidate to be the permanent CEO of Twitter.