Twitter (TWTR  ) shares were down by nearly 30% following the company's Q3 results which showed a big miss in terms of earnings expectations. Additionally, the company continues to see increased costs as it ramps up its spending for its various new initiatives.

Twitter has been notorious among investors. It clearly has major potential especially as it's one of the most popular websites on the planet and is a force in terms of culture, politics, and news. However, the company has failed to capitalize on this potential in terms of building a profitable business to the extent of competitors like Meta's Facebook (FB  ) or Snap (SNAP  ). There had been some optimism regarding the unveiling of its premium twitter feature and purchase of Revue, a newsletter subscription platform. However, these results indicate that they are garnering little traction.

Inside the Numbers

In Q3, Twitter reported a loss of $0.67 per share which badly missed expectations of a profit of $0.65 per share. However, the miss was mostly due to a one-time litigation from a shareholder lawsuit accusing the company of misleading investors about user growth and engagement. The company settled the case last month for $809.5 million. Overall, it had a loss of $537 million, compared to a profit of $29 million last year.

Revenue increased 37% to $1.28 billion which was in-line with estimates. Unlike many competitors, Twitter didn't see much of an impact from Apple's (AAPL  ) privacy changes. Its ad revenue was 41% higher to $1.14 billion, and total ad engagement increased by 6% compared to last year.

Monetizable daily active users fell slightly short of expectations at 211 million vs 211.9 million. This was a 5 million increase from Q2 and a 13% gain from last year's Q3.

Stock Price Outlook

Initially, Twitter's stock was trading 4% after hours, however these gains quickly turned into losses on the company's conference call. Overall, Twitter's stock is down by nearly 35% since its peak in February of this year.

The bull case for Twitter is that the company will figure out a way to monetize its cachet and influence. But, it's hard to be optimistic given that the company has failed to do so over the past decade. Further, it continues to be led by founder Jack Dorsey with many activists convinced that he is unable to engineer such an initiative and culture change given his long tenure at the company and status as CEOs of two, multi-billion dollar public companies.