Twitter shares opened more than 10% lower on Thursday.
The social media platform disappointed investors with poor monthly active user growth in the second quarter.
Despite its appeal among celebrities and public figures, Twitter has struggled to sustain its closely watched user growth even as it invests in features and live content to help draw viewers and boost user engagement.
It is in a tough competition for advertising dollars with other platforms like larger rival Facebook Inc and Snap Inc’s messaging app Snapchat.
The company also reported a wider quarterly net loss and lower revenue, and said it did not expect its total revenue growth to pick up in the second half of the year.
Twitter had 328 million average monthly active users in the three months through June 30, unchanged from the previous quarter. Analysts were expecting 328.8 million, according to financial data and analytics firm FactSet.
In the United States, Twitter's average monthly active users fell to 68 million from 70 million in the first quarter. Monthly active users, a key performance indicator for social networking services, is typically calculated by tabulating the number of users who have logged in and logged out during the 30-day period.
Twitter's shares fell as much as 14.1% at one point after the open to $16.85, wiping out about $2 billion in market value. Twitter's second-quarter net loss widened as it took a $55 million impairment charge related to an investment writedown and revenue fell 4.7%.
Twitter said in a letter to investors that the company does not expect its total revenue growth rate to improve in the second half of 2017 "due to headwinds in the second half (of approximately $75M) associated primarily with de-emphasized revenue products."
But the social media platform said it is looking to data licensing, which it claims is its fastest-growing product area, to turn around revenue in the future.
