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Electronic cables are silhouetted next to the logo of Twitter in this September 23, 2014 illustration photo in Sarajevo.

Dado Ruvic/Reuters

Twitter Inc. received an unwelcome reminder of the power of its own real-time publishing platform on Tuesday when an apparently accidental early release of its first-quarter earnings battered its stock.

The selloff was sparked in part by the Twitter feed for financial analysis company Selerity, which tweeted snippets of the company's first-quarter report shortly after 3 p.m. ET on Tuesday. The company had planned to release earnings after markets closed an hour later. Twitter says it is investigating, but sought to shift some responsibility by pointing out that the Nasdaq operates its investor relations site where the results appeared.

Twitter's stock fell 5.8 per cent before trading was halted on the New York Stock Exchange. When trading resumed, the beating continued, and the stock closed down more than 18 per cent at $42.27 (U.S.). As much as $5-billion was knocked off the company's market capitalization by the foul-up.

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But it wasn't just the leak that traders punished. The San Francisco-based company also missed on revenue – by some estimates the gap was more than $20-million.

Twitter had forecast it would record $440-million to $450-million in revenue and some analysts expected as much as $457-million.

In the end, it was only able to book $436-million in revenue, while at the same time, the key measure of monthly active user growth slowed. Twitter reported 302 million monthly active users, up 18 per cent year over year, but down slightly from fourth-quarter MAU growth of 20 per cent. Mobile users made up an average of 80 per cent of the MAUs.

Dick Costolo, chief executive officer of Twitter, cited "lower-than-expected contributions from some of our newer direct response products," for the shortfalls. Examples of these products include a click-to-call button on ads that would help Twitter reach into local advertising the way Google Maps and Yelp is able to with similar features.

"It calls into question why they didn't see this coming," said Victor Anthony, an analyst at Axiom Capital Management. "I don't think anyone ever questioned their ability to generate revenues."

Back in November, 2014, at Twitter's analyst day, chief financial officer Anthony Noto suggested that if the company could increase the amount of ad density (or share of ads in a user's stream) to 5 per cent from its existing 1.3 per cent, it could add $5-billion in revenue.

On Tuesday, Mr. Noto confirmed in the investor call, "We're not close to 5 per cent … we're well below that." Mr. Noto also said that after Tuesday's poor results, revenue guidance will be lowered for the rest of the fiscal year.

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Twitter reported a loss of $162-million, or 25 cents a share, surprising analysts, as it compared with a loss of $132-million, or 23 cents for the first quarter of last year. Excluding certain costs and items, Twitter did exceed analyst expectations in profit per share, hitting 7 cents for the quarter, against an expected 4 cents.

"The revenue miss overwhelms all," wrote RBC Dominion Securities analyst Mark Mahaney, who maintained a rating of "sector perform."

"[It] raises the question of how much visibility into advertiser and consumer demand for its offerings Twitter really has … . Management will again have to address credibility concerns."

Selerity, which says its real-time news and event detection platform is used by investors to make faster and more informed decisions, says its Web-crawling technology sourced the earnings release "from Twitter's Investor Relations website investor.twitterinc.com."

"No leak. No hack," the company's Twitter account posted after it was accused of leaking the data.

It's the second time in recent months that Twitter has had sensitive financial details leak on its own platform. In November, Mr. Noto appeared to publish a private message on his public Twitter feed that read, "I still think we should buy them. He is on your schedule for Dec. 15 or 16 – we will need to sell him. I have a plan."

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After that, the company acquired India-based mobile marketing company ZipDial, in January, and Tuesday announced the purchase of TellApart, which offers cross-device ad-targeting technology.

"If it can't keep its results safe, can it protect its users? This just shows that the company is poorly managed," said Todd Schoenberger, managing partner of Landcolt Capital LP in New York.

"Twitter is one of those cases where you are better off as a customer than a shareholder," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "It's a great service but they are not able to monetize it."

With files from Bloomberg and Reuters

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