Twitter says Musk’s ‘uncertainty’ is hurting revenue – Latest News – The Nation

Twitter blamed Friday’s disappointing results on “headwinds”, including the uncertainty imposed on the company by Elon Musk’s chaotic takeover bid.

The company is locked in a legal battle with Tesla’s mercurial boss over its efforts to pull out of a $44 billion deal to buy the platform, leaving the company in limbo.

Twitter missed expectations with revenue of $1.18 billion, due to “advertising industry headwinds…as well as uncertainty related to Twitter’s impending acquisition by a subsidiary of Elon Musk,” the company reported.

Additionally, in the current environment of tight credit conditions and turbulent economic conditions, many companies like Twitter that rely heavily on advertising are suffering from shrinking advertiser budgets.

“Twitter is on a rowboat in the middle of a storm,” said analyst Jasmine Enberg. “The Musk saga rocked the boat even harder.”

“Twitter is now in the unenviable position of convincing advertisers that its ad business is strong,” she added.

Twitter also reported that the number of “monetizable” daily active users – those who can be shown advertising – rose by 8.8 million, less than analysts expected, to 237.8 million.

“Overall, we would characterize daily active user metrics as better than expected and holding up relatively firmly in this environment,” analyst Dan Ives said.

Despite the lackluster results, Twitter’s stock closed nearly a percent higher at $39.84 as investors seemed relieved the news was not worse.

By comparison, Snap shares ended down 39% on the day after the parent company of messaging app Snapchat reported disappointing results.

Twitter’s results cover the period ending in June, so don’t include Musk’s decision in July to try to “terminate” the deal over the argument that the platform wasn’t available on his count of fake accounts.

The social media network, which is a key exchange of ideas, news and entertainment, hit back saying the Tesla chief had already agreed to the deal and couldn’t go back now.

“Twitter believes Mr. Musk’s alleged termination is invalid and abusive, and the merger agreement remains in effect,” it said in the earnings report.

Twitter scored a victory earlier this week in its fight with Musk, when a judge agreed to an expedited trial on whether to force the billionaire to complete the takeover.

Musk’s lawyers had requested a date in February 2023, but the court in the eastern US state of Delaware closely followed the uncertainty-ridden platform’s desire for speed and fixed the beginning of October.

Billions of dollars are at stake, but so is the future of Twitter, which Musk says should allow all legal speech – an absolutist stance that has raised fears the network could be used to incite violence.

As the deal remains in limbo, Twitter finds itself with anxious employees, wary advertisers and crippled management.

In early May, at an annual marketing event where companies negotiate major advertising deals, Twitter was “not able to provide advertisers with any clarity or confidence” that it would continue to be a safe showcase for them, Angelo Carusone, president of watchdog group Media Matters, told AFP previously.

“They didn’t go far from what they normally sell at this event. And it’s obviously been slow since then,” he said.

The San Francisco-based social network can’t afford to lose customers.

Unlike big fish like Google and Facebook’s parent company Meta, which dominate online advertising and make billions in profits, Twitter lost hundreds of millions of dollars in 2020 and 2021.

The group will capture less than 1% of global advertising revenue in 2022, according to eMarketer, compared to 12.5% ​​for Facebook, 9% for Instagram and nearly 2% for booming TikTok.