Subject: FW: Twitter Q1 Earnin s [C]

Subject: FW: Twitter Q1 Earnin s [C] From: Paul Morris Date: Tue, 28 Apr 2015 16:26:49 -0400 To: Stewart Oldfield ‹ > Classification: Confidential Paul Morris Managing Director Deutsche Bank Private Bank Office: 212-454-0701 Cell: 917-971-2507 From: Vahe Stepanian Sent: Tuesday, April 28, 2015 4:24 PM To: Jeffrey Epstein Cc: Daniel Sabba; Ariane Dwyer; Richard Kahn; Paul Morris Subject: Twitter Q1 Earnings [C] Classification: Confidential Jeffrey — as you may have seen, Twitter (TWTR) Q1 earnings were leaked this afternoon prior to the company's scheduled earnings call after the close today. TWTR's revenue fell short of estimates in the first quarter, $436mm vs. analysts' average projection of $456mm. Results were first reported by Selerity Inc, a New York based provider of financial news and information. Following the leak, Twitter officially reported earnings and cut Q2 revenue guidance. TWTR closed down —18% today to $42.27 on the back of the news. I've included your original TWTR trade details below for your reference. EFTA01403568 Please let us know if you wish to add to your position. Thank you, Vahe Source: Bloomberg Finance LP TWTR Trade Details (as of trade date, 1/27/2015) Total Return Swap: Swap Seller: DB Swap Buyer: Southern Financial LLC Ticker: TWTR Size: 100,000 shares Expiry: 1/27/2016 Spread: lmL+ 75bps Resets: Monthly Optional Early Termination: Applicable, 3 days (two-way) Commissions: $0.03 per share in and out Initial Strike: $38.9662 (Gross) / $38.9962(Net) European Call options on TWTR: Option Seller: Option Buyer: Southern Financial LLC DB EFTA01403569 Shares: 100,000 Notional: $3,896,620.00 Type: Call Style: European Expiry: 1/27/2016 Strike $38.9662 Premium client receives: $728,278.28 (18.69%) Twitter Cuts Sales Outlook; Shares Plunge After Results Leak (1) 2015-04-28 20:02:43.200 GMT (Updates with 2015 forecast in first paragraph.) By Sarah Frier (Bloomberg) -- Twitter Inc. posted first-quarter revenue that fell short of estimates and cut its sales forecast, signaling a struggle to attract more users and advertisers The stock fell as much as 26 percent, a record decline. Revenue will be $470 million to $485 million in the second quarter, Twitter said in a statement Tuesday. That missed analysts' average projection for $538.1 million, according to estimates compiled by Bloomberg. Full-year guidance was cut to $2.17 billion to $2.27 billion, from the previous range of $2.3 billion to $2.35 billion. "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." Chief Executive Officer Dick Costolo has been pushing product and engineering teams, which are being led by new managers, to step up the pace of innovation and dispel any doubts about Twitter's potential as an advertising and social - media destination. The San Francisco -based company is facing greater pressure to show that such initiatives are delivering more users and revenue, according to Brian Wieser, an analyst at Pivotal Research Group. EFTA01403570 "When you're communicating with investors there's some expectation that you'll actually deliver on what you're aspiring towards," said Wieser, who has a hold rating on Twitter's stock. "The message needs to be matched by numbers, or Twitter's credibility starts to become an issue." Slowing Growth The number of monthly active members climbed 18 percent to 302 million, compared with 20 percent in the prior quarter. Revenue rose 74 percent to $436 million, missing analysts' average projection for $456.2 million. The results were first reported by Selerity Inc., a New York-based provider of financial news and information, less than hour before the end of Tuesday's trading. Twitter fell 18 percent to $42.27 at the close. Trading resumed after shares were halted following Selerity's report. Earnings excluding some items were 7 cents a share, compared with analysts' average estimate for 4 cents. Twitter's first-quarter net loss widened to $162 million from a loss of $132.4 million a year earlier. Costolo, facing criticism last year because of slowing user growth, promised investors in November that the company would start revamping its products and services to make them easier to use. That has resulted in new features such as "While You Were Away," which delivers the most popular tweets that occurred during a person's absence, and Highlights, an Android feature that pushes a twice-daily digest of tweets direct to a person's phone notifications. The tweaks, which are helping to minimize the flood of information, are aimed at attracting new users. Twitter's home page, which used to just have an option to log in, now has categories, such as Nascar and cute animals, for people to explore even when they aren't logged in to an account. Those who do choose to sign up for the first time get an instant timeline based on their phone contacts and interests, making it easier to get started on the product. For Related News and Information: Twitter Tries to Tone Down the Chirping Twitter's Revenue Tops Estimates as Site Draws More Ads Twitter Adds Features to Woo Users After Discord Slowed Rollouts Twitter Buys Niche So Vine's Celebrities Can Work for Brands Twitter income charts: TWTR US <EQUITY> FA Q IS CHART <GO> Twitter relative value: TWTR US <EQUITY> RVG <GO> Twitter price graph: TWTR US <EQUITY> GPO <GO> Top technology stories: TTOP <GO> EFTA01403571 To contact the reporter on this story: Sarah Frier in San Francisco at +1-415-617-7134 or [email protected] To contact the editors responsible for this story: Jillian Ward at +1-415-617-7261 or [email protected] Reed Stevenson EFTA01403572