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Friday, February 3, 2023

Uncertainty over Musk’s buy operation weighed on Twitter’s second-quarter results

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An image of Elon Musk on a mobile screen alongside Twitter logos. Reuters

Twitter shares plummeted this Friday after the social media platform, which was embroiled in a legal battle with Elon Musk over the suspended purchase operation, reported that it lost $270 million in the second quarter amid doubts The company that owns the little bird’s social network is ahead of other tech companies like Alphabet, Apple, Meta and Microsoft, which are set to report earnings next week in a worrying scenario for the sector Twitter reported a net income of $65 million for the same period in 2021, the multinational said in a statement.Twitter’s revenue was $1,176.6 million between April and June,1, 1 percent less than a year earlier.

Elon Musk’s rudeness and fear have not only helped fuel uncertainty about Twitter’s direction, they’ve also eroded its credibility, according to analysts, resulting in a drop in value. In fact, Twitter and Musk will face each other in court in October after the world’s richest man’s lawyers requested an extension to liquidate the trial until February 2023. The main objections of the founders of Tesla and SpaceX have to do with the number of fake accounts and bots on the social network.

Between April and June, Twitter’s advertising revenue grew 2.2% year over year to $1,076 million, while subscription revenue fell 26.3% to $101 million. International sales declined 4% to $515 million.

In this way, in the first half of this year, the company achieved a net profit of $243.3 million (238 million euros), up 82% year-on-year, while revenues increased 6.8% to $2,377.6 million (2,330 million euros). euros) rose euros).

Better data offers average monetizable daily active users, which reached 237.8 million between April and June, an increase of almost nine million compared to the first three months of 2022 and 16.6% in one year. The controversy sparked by Musk’s buyout on a particularly noisy social network has acted as a driving force.

Of the total monetizable active daily users, 41.5 million visited the network in the United States at the end of the second quarter, compared to 39.6 million in the first quarter (up 14.7% from a year earlier). In the rest of the world, the annual increase was 17% to 196.3 million, compared to 189.4 in the first quarter.

This Tuesday, Delaware Court of Equity Judge Jude McCormick ruled that the trial over Elon Musk’s reverse purchase of Twitter should go ahead in October after the tycoon requested it be postponed to February to better prepare the defense case. McCormick thus agreed with the company, which had asked to “speed up” the process, albeit by September. At stake is a $44 billion operation that has revolutionized not only the sector but the global economy.

After three months of denials and rumours, with recent media coverage, on July 8 Musk informed Twitter of his withdrawal from the social network’s purchase agreement after receiving no response from the company as to the number of false accounts existing on the platform as well as the method followed by the company to check and expose them. It wasn’t Musk’s first rudeness, temporarily suspending purchases in mid-May in contradiction to the company’s calculation of false accounts, less than 5% of profiles according to Twitter.

They paint tech companies crudely, with hiring plans slowed, if not by waves of layoffs, by economic uncertainty, a phenomenon particularly notable among startups. Snap shares plunged yesterday after disappointing quarterly results. The company, which operates social media platform Snapchat, said it would “significantly reduce” hiring and said revenue growth in the current quarter was “roughly zero.” The current macroeconomic climate seems elusive for digitization.

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Source elpais.com

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