Saturday, 8 October, 2022

Twitter says Musk ‘uncertainty’ hurting revenue

Twitter says Musk ‘uncertainty’ hurting revenue

WASHINGTON: Twitter blamed disappointing results Friday on "headwinds," including the uncertainty imposed on the company by Elon Musk's chaotic buyout bid.

The firm is locked in a legal battle with the mercurial Tesla boss over his effort to walk away from a $44 billion deal to purchase 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 the pending acquisition of Twitter by an affiliate of Elon Musk," the company reported, reports AFP.

Also, in the current context of tightening credit conditions and economic turbulence, many companies like Twitter that rely heavily on ads are suffering from a decrease in advertisers' 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 solid," she added.

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

"Overall we would characterize the daily active user metrics as better than feared and holding up relatively firm in this environment," said analyst Dan Ives.

Despite the less than stellar results, Twitter's stock closed up nearly one percent at $39.84, as investors seemed relieved the news wasn't worse.

By comparison, Snap's stock finised down 39 percent a day after the parent company of messaging app Snapchat reported disappointing earnings.

Twitter's results cover the period ending in June so don't include Musk's move in July to try to "terminate" the deal on the argument that the platform was not forthcoming about its tally of fake accounts.

The social media network, which is a key exchange of ideas, news and entertainment, has countered by saying the Tesla chief already agreed to the deal and can't back out now.

"Twitter believes that Mr. Musk's purported termination is invalid and wrongful, and the merger agreement remains in effect," it said in the earnings report.

Twitter notched a victory earlier this week in its fight with Musk, when a judge agreed to a fast-track trial on whether to force the billionaire to complete the buyout.