Posted: July 25, 2022
Twitter blames second-quarter loss on advertising ‘headwinds’ and Elon Musk
By Movieguide® Contributor
As Twitter’s second-quarter revenue fell 1%, below Wall Street estimates, the company attributes the loss to ad industry headwinds and Elon Musk’s attempt to exit its acquisition agreement.
Variety reports Twitter’s second-quarter revenue totaled $1.18 billion, down 1% year-over-year, as analysts expected Twitter to post $1.34 billion in revenue, which would have been a 10.5% drop growth Year after year.
Twitter’s costs rose 31% in the second quarter, “resulting in a net loss of $270 million…compared to net income of $66 million a year ago.”
The loss reflects “Ad Industry Headwinds Associated with the Macro Environment” and “Uncertainty of Imminent Twitter Acquisition” with Musk.
“Twitter and other ad-heavy social media companies have felt the brunt of economic challenges, as fears over inflation, interest rate issues, ongoing supply chain issues and the war in Ukraine led some advertisers and brands to adjust their ad spend,” CNBC reports.
Other tech companies are facing similar issues. Snap, Snapchat’s parent company, “reported second-quarter results below already lowered expectations, telling investors would ‘significantly’ slow hiring amid decelerating incomes. “Demand growth on our advertising platform has slowed significantly.”
Additionally, Twitter’s losses come amid the company’s legal battle with Musk. As Twitter demands it honor its $44 billion acquisition deal, Musk says it needs “verification of Twitter’s claim that fake accounts and spam account for less than 5% of DAUs “. [daily active users].”
Twitter lawyers say Musk has buyer’s remorse, and a Delaware Chancery Court judge has set a trial date in October to hear the company’s case against Musk.
Like other companies that experimented Losses in the second quarter, Twitter often promotes and allows immoral contentfrequently censorship and prohibition accounts that attempt to tell the truth about the culture problems. While other factors influence its revenue decline, Twitter could foster or at least enable the free discussion of ideas, which could improve its market value.
Movieguide® previously reported on Twitter’s lawsuit against Musk:
Due to Elon Musk’s recent decision not to pursue the purchase of Twitter, the leading social media site has filed a lawsuit.
The Tesla and SpaceX CEO originally planned to move forward with a $44 billion deal to acquire Twitter. However, Musk turned his back on the company after alleging the company breached “several provisions” of their original contract.
However, Twitter intends to pursue the deal and secure it in court.
“We are committed to completing the transaction at the price and terms agreed to with Mr. Musk and plan to take legal action to enforce the merger agreement. We are confident that we will prevail in the Delaware Court of Chancery,” the Twitter Board told People Magazine.
Musk responded to Twitter’s lawsuit in a meme, ironically posted to his Twitter account.
“They said I can’t buy Twitter, so they won’t release information about the bot, now they want to force me to buy Twitter in court, now they have to release information about the bot in court.”
Earlier, Musk said in a filing that Twitter failed to provide key information regarding the platform’s fake accounts.
“At times Twitter has ignored Mr. Musk’s requests, sometimes it has denied them for reasons that appear unwarranted, and at times it has claimed compliance while giving Mr. Musk incomplete or unusable information,” the filing said.
