Twitter's toxic avenging takes a toll on overall user counts

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One of the main reasons for this appears to be the platform's consistent decline in their "monthly active users" number. The company's stock tumbled 20 percent.

Jennifer Grygiel, a Syracuse University professor who specializes in social media, said the market is coming to grips with a tougher picture for the sector as companies seek to curb manipulation and abusive conduct while coping with new regulations on privacy and data protection.

Twitter reported record profits and exceeded expectations for revenue in the second quarter, but a drop in user count due to the social network's efforts to remove bots and fake accounts and a miss on earnings per share sent its stock into a tailspin Friday.

Twitter's EBITDA (Earnings before interest, taxes, depreciation, and amortization) was $265 million, up from $178 million past year, but critically, their monthly active users for the quarter were 335 million, down from 336 million in the first quarter.

But that wasn't enough for investors.

Facebook's tumble was the worst-ever single-day drop in value for a USA company, and led a sell-off in technology companies that offset solid gains in other areas of the market, including industrial and energy stocks and consumer goods companies.

"We are confident that this is in the best long-term interest of the platform and will enable long-term growth as we improve the health of the public conversation on Twitter", the company said. US advertising grew 9%, to $293 million.

In the financial report released Friday, the company acknowledged that "our work sometimes includes the removal of accounts, some of which are included in our metrics", but that getting rid of problematic accounts will make the service more user-friendly, driving future growth. The company said in April that monthly active user growth could be "negatively impacted" by the new rules.

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Despite the decline in monthly users, Twitter posted a quarterly profit of $100 million compared to a loss of $116 million a yea ago. Technology improvements have resulted in removing twice the number of accounts that violate Twitter's spam policies.

Twitter shares have risen 79 percent since the beginning of the year.

Watch Twitter trade in real time here.

"We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviours that distort and distract from the public conversation", chief executive officer Jack Dorsey said in a prepared statement.

"We'll continue to invest heavily in making Twitter a healthier place because that's the right thing to do", Dorsey told analysts on a conference call. The company has previously disclosed these numbers.

The number of monthly active users dropped to 335 million in the quarter, a decrease of more than 3 million in the quarter. The stock has more than doubled in the last 12 months.

In the meantime, Twitter's business, heavily dependent on advertising, is hanging in there.