There was more bad news for Twitter stock today as Chief Executive Officer Jack Dorsey is under fire for cutting Twitter Inc.'s (NYSE: TWTR) staff by up to 9% in October.
According to USA Today, the Rev. Jesse Jackson sent a letter to Dorsey sharing his concern that Twitter's layoffs disproportionately affect Hispanics and African-Americans.
Twitter stock is down more than 1.8% today.
The social activist wants Twitter to disclose the number and percentage of underrepresented minorities who lost their jobs in the recent downsizing. Dorsey first announced the Twitter layoffs in a tweet stating the decision was necessary to enable Twitter to move with greater focus and reinvest in growth.
Jackson's inquisition is the last thing Twitter needs after its disastrous 2015 Q3 earnings report...
Twitter only reported 320 million monthly active users (MAUs) in its quarterly earnings report released on Oct. 27. From Q2 2015 to Q3 2015, Twitter only grew MAUs 1.25%.
With stagnant user growth and impressive numbers from competitor Facebook Inc. (Nasdaq: FB), many TWTR shareholders are panicked.
Complicating matters is the fact that Dorsey is also the CEO of Square Inc. (NYSE: SQ), a company launching an IPO the week before Thanksgiving. So Dorsey doesn't even have his full attention devoted to Twitter's problems.
With dismal earnings, increasing criticism, and a distracted CEO, it's starting to look like a rebound for Twitter stock is a long shot...
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CEO Jack Dorsey has only held the title of permanent Twitter CEO since Oct. 5, so he's not responsible for every problem.
But Twitter's series of missteps show how difficult it will be for Dorsey and his executives to turn things around...
Twitter ran a television ad on Game 1 of the World Series that drew more criticism than excitement. According to CNN Money, the 30-second ad was designed to highlight Twitter's new "Moments." But to many, the ad was a flop. John Gruber, a notable Apple blogger, tweeted the ad was so bad that someone should be fired.
Media buyers speculate the ad cost Twitter more than $4 million.
Twitter also came under attack this week for changing its "Favorite" feature to a red heart-shaped "Like" symbol.
Some social media users felt that this was a rip off of Facebook's like button. Twitter also received criticism because color-blind users wouldn't be able to distinguish between the red heart symbol and green retweet button.
Twitter stock opened today (Thursday) at $29.47, just an 11.77% increase from its IPO in November 2013. Twitter stock is now down more than 43% since April.
And many analysts think its current price is still too high. Morgan Stanley downgraded the Twitter stock price to $24 per share on Oct. 21 from its earlier price target of $30 per share.
Dorsey and key Twitter executives have stressed it will take time for the company to gain new users and improve its profitability, meaning TWTR stock is not positioned for a short-term turnaround.
Jack Delaney is an Associate Editor for Money Morning. You can follow him on Twitter and follow Money Morning on Facebook.
