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Twitter stock rises despite admitting to inflated user numbers

Photo: Richard Drew / AP

Twitter stock was up over 10% in pre-market trading Thursday after the company announced that it beat revenue and growth expectations. But the success is being overshadowed by the fact that the company admitted to inflating user growth over by approximately 1-2 million users per quarter for four quarters. The company said in a letter to shareholders that the miscalculation occurred from including "certain third-party applications" that should not have been counted in Twitter's monthly active users number.

Why it matters: Twitter has faced criticism in the past for inflating video metrics and for its "inadequate" response (Sen. Mark Warner's words) to the Senate Intelligence Community's inquiry into Russia involvement on its platform. At a time when technology platforms are under increased scrutiny for not being transparent enough, this type of admission only plays into the narrative that tech companies are not properly policing themselves.