Twitter posts losses amid tumultuous acquisitions

On Friday, Twitter posted below-expected quarterly results. The social network attributed this failure in part to the uncertainty surrounding its potential takeover by Elon Musk. The turnover of the group, which is trying to force the entrepreneur to fulfill his obligations in court, decreased (-1%) to $1.18 billion over the year.

It also returned to negative territory with a net loss of $270 million, according to a statement released on Friday. On a per-share basis, an indicator closely watched by Wall Street, losses are nearly three times what analysts had expected.

“Twitter is a boat in the wind”

This decline is attributed to “headwinds” in the advertising sector, concerns affecting the economic situation, as well as “uncertainty associated with the ongoing acquisition of Twitter” by Elon Musk. “Twitter is in a boat in the middle of a storm,” commented Jasmine Enberg, an analyst at Insider Intelligence, who recalled that the group was “used to doing bad work.”

With credit tightening and the economic downturn, companies based entirely on advertising are suffering from shrinking advertising budgets.

Our analysis: Four lessons from the Elon Musk and Twitter fiasco

Snap is in bad shape

So on Thursday, Snap opened up the social media ball and reported bigger losses than expected and lower than expected turnover, resulting in a loss of over 39% in the stock market in Friday’s session alone.

As for Twitter, analysts nonetheless hailed an increase of 8.8 million daily active users, referred to as “monetizable” i.e. exposed to ads on the platform, to a total of 237,800,000.

“This is better than we feared and the numbers remain relatively strong given the current situation,” Dan Ives of Wedbush Securities replied in a note. “Compared to Snap’s nightmare, we see ads haven’t crashed,” the analyst added. Amid other social networks that swept the stock market on Friday, Twitter shares added 0.81%.

Court appointed in October

In addition to the unfavorable economic situation for the entire sector, Twitter is also weakened by the saga of its hypothetical takeover by Elon Musk. After the contractor’s refusal, in early July, the case moved to a legal basis, where the leaders intend to ensure that the billionaire is forced to acquire Twitter.

Delaware Specialized Court Judge Tuesday (Northeast) ordered a reduced five-day trial, in October. Thus, the magistrate granted the request of Twitter, which called for an expedited procedure to limit the damage from this saga to the group, and rejected, on the other hand, the arguments of Elon Musk’s lawyers that the debate would not open. until 2023.

The businessman accuses Twitter executives of lying about the share of automated accounts and spam on the platform and of not providing him with enough data to verify. The Blue Bird group disputes these claims and accuses Elon Musk of using them as a distraction.

An asset in the face of justice?

“The results (released on Friday) provide additional evidence that Elon (Musk) has had a detrimental effect on the company’s fundamentals, which should strengthen Twitter’s position in the court,” CFRA Research’s Angelo Zino said in a note. Many investors believe that Twitter has regained control, allowing its stock price to recover.

It is now above its price on April 4, the day before the announcement of Elon Musk’s stake in the capital, the first step before submitting an offer for the entire company, ten days later.

However, the social network “is now in the unenviable position of having to convince advertisers that its advertising business is sustainable, regardless of the outcome of the legal battle with Musk,” Jasmine Enberg explained. As with the Q1 release, Twitter did not host a traditional conference call on Friday to present the results.

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