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TWITTER V. MUSK

Twitter is blaming Elon Musk for its poor second-quarter results

Elon Musk's tweets on a phone
Chris Delmas/AFP via Getty Images
Twitter says Elon Musk is hurting its business performance.
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Twitter kept its earnings report simple for the second fiscal quarter of 2022. The social media company did not hold its usual conference call in which executives take questions from financial analysts. Citing Elon Musk’s pending $44 billion takeover, Twitter merely posted its results on its website.

While Twitter’s user base rose 16.6% year over year to 237.8 million, the social media company’s revenue fell 1% to $1.18 billion during that period. Results were worse than expected: On average, according to FactSet, analysts predicted revenue would hit $1.32 billion. The company swung to a net loss of $270 million, after posting a profit of $65 million this time last year.

Twitter cited “advertiser industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”

Twitter argued in court this week that Musk was hurting its business. Now its earnings report says that too.

Twitter v. Musk set for October

Twitter is currently suing Musk for trying to back out of the $44 billion deal to acquire the company, which the two parties committed to on April 25.

Twitter alleged in its complaint (pdf) that Musk’s actions have “cast a pall over Twitter and its business.” In court on July 19, Twitter’s lawyers asked for an expedited trial, arguing that “the continued uncertainty… inflicts harm on Twitter every hour of every day.”

There’s reason to believe Twitter’s stock price, which rose about one percent in intraday trading today, is buoyed by the promise of the Musk acquisition at $54.20 per share. Twitter’s nearest competitor Snap dropped nearly 40% after posting disappointing earnings after-the-bell on July 21.

Twitter’s spam problem

Twitter also appeared to respond to Musk’s constant attacks on its user base. Musk has accused the social media platform of lying about the percentage of spam users it counts as real in its regulatory filings.

In its earnings report, Twitter said an internal review found that fewer than 5% of its second quarter mDAU, or monetizable daily active users, were “false or spam accounts,” doubling down on previous statements.

Musk has alleged that Twitter’s portion of spam is much higher and has asked a judge in Delaware to let him out of the deal on that basis.

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