Twitter has reported its slowest pace of user growth during the fourth quarter.
The news dimmed hopes that the social media phenomenon can sustain its fast pace of expansion and wiped out more than 20% of its value on Wall Street.
The San Francisco company posted better than expected quarterly revenue of $243m in its first results as a public company. But investors focused on the anaemic user growth, as well as a severe decline in timeline views, a measure of user engagement.
Twitter, which held an initial public offering in November at $26 a share, has divided investor opinion in the months since.
Its shares had raced to more than $66 ahead of yesterday's results, despite an absence of news, but fell to less than $52 by mid-afternoon.
Twitter's valuation was predicated in part on the belief it could expand its appeal and eventually grow to a scale close to Facebook's, which has five times as many users. Some analysts warned that its valuation looked increasingly bloated.
User growth, a closely watched metric, in fact sputtered. Twitter averaged 241 million monthly users in the December quarter, up just 3.8% from the previous three months and the lowest rate of quarter-on-quarter since Twitter began disclosing user figures.
At about 30 times projected 2014 sales, Twitter was more than twice as expensive as Facebook or LinkedIn, based on its closing price last night.
Twitter's user numbers grew at 10%, 7% and 6% during the first three quarters of the year, respectively.
Timeline views dropped sharply from 159 billion to 148 billion in the quarter, signalling that users were refreshing their Twitter accounts less often.
But the efficacy of its advertising business model - which places ads inside users' timelines every time they refresh - appeared to steadily improve. The company said it made $1.49 per 1,000 timeline views, a significant jump of 765 from the previous year.
Twitter, which lets users send 140-character messages through its mobile app or online, had a net loss of $511.5m in the fourth quarter, widening significantly from a year earlier as it shelled out on its sales force, research and marketing.
Twitter said it was targeting revenue of $230-240m in its fiscal first quarter.