In the summer in which social media company Twitter saw the takeover by billionaire Elon Musk become uncertain, the American group has to endure more bad news. Contrary to expectations, Twitter did not convert more, but actually less in the second quarter than a year ago. Investors were not shocked by this: the stock price opened flat on Friday.
In the spring months of last year, Twitter turned in just under 1.2 billion dollars (1.2 billion euros), now it was 1 percent less, while more than 1.3 billion dollars was expected. Due to the sharp rise in costs in recent months, Twitter also remains with a significant loss: 270 million dollars, after a profit of almost 66 million in the second quarter of last year.
The tech company attributes these disappointing results to the hesitant attitude of advertisers, on which Twitter relies heavily for its revenue. This has a general reason, which also affects other tech companies: the cooling of economies worldwide. But the “uncertainty surrounding the unfinished takeover” by Musk also hit Twitter hard. At the same time, the number of regular users grew rapidly, by more than one eighth on an annual basis.
Elon Musk, founder of car maker Tesla and the richest man on Earth, announced in late April that he wanted to take over Twitter. The entrepreneur (51) made an offer of $44 billion, converted about $54 per share. Initially, the Twitter top tried to oppose the proposal, but when it turned out that Musk had already talked to major shareholders, the company still agreed.
By taking Twitter off the stock exchange, Musk hoped to be able to implement changes faster. For example, he wanted to make the company less dependent on advertisements, and also to offer subscriptions.
After the preliminary contracts were signed, Musk began to backtrack. As tech stocks in particular on exchanges worldwide began to nosedive, the Tesla founder accused his prey of breach of contract. Twitter would not have provided sufficient clarity about the number of spam accounts on the platform, which, according to the buyer, was sufficient reason to cancel the agreements without consequences.
Twitter did not just accept that and calls Musk’s argument “invalid and illegal”. The group is now trying to keep the tech entrepreneur to the agreements made through the courts. Musk tried to postpone that lawsuit until next year, but a US judge decided otherwise this week. The case is due in October.
As with the previous results, Twitter did not want to comment on its annual figures on Friday because of the not yet completed acquisition. However, the company repeated what it also wrote in a message to the American stock market watchdog SEC a week earlier – that there is only one hurdle that can stand in the way of the takeover: its own shareholders. It remains to be seen when they will have to make a statement about the takeover plans.
A version of this article also appeared in the newspaper of July 23, 2022
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