Twitter reports second-quarter loss of $270 million, blames weak ad market and uncertain $44 billion deal with Elon Musk

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Summary:

  • Twitter posted a quarterly loss of $270 million in its first earnings report since Elon Musk expressed interest in buying the company.
  • Twitter cites a weak advertising market and Elon Musk’s eighty-degree turn on the $44 billion acquisition deal as the main reasons for the negative earnings.

Social media giant Twitter released a quarterly earnings report that fell short of expectations on Friday morning.

Twitter blames a weak advertising market and an uncertain $44 billion acquisition deal with Elon Musk.

According to Reuters, Twitter lost $270 million between April and June. Its net loss translates to 35 cents per share versus a profit of $65.6 million a year earlier, or 8 cents per share.

The company also reported second-quarter 2022 revenue of $1.2 billion, below analyst estimates of $1.3 billion. Its ad revenue rose 2% to $1.08 billion, missing expectations of $1.22 billion.

Twitter explained that the below-expected performance was attributed to its ongoing legal battle with Elon Musk over the $44 billion acquisition deal it had sought terminated due to what it claimed was inaccurate data. about bots and fake accounts. Twitter’s expenses related to the failed Musk deal totaled $33 million in the quarter.

Additionally, Twitter pointed out that a weak advertising market was also to blame.

Jasmine Enberg, senior analyst at research firm Insider Intelligence, told Reuters that Twitter was struggling to explain to investors that all was well with the company. She says:

Twitter is now in the unenviable position of convincing advertisers that its advertising business is strong regardless of the end of its legal battle with Musk, and its second quarter earnings show that the platform has its work cut out for it. achieve it.

The Twitter lawsuit against Elon Musk will begin in October.

During the quarterly earnings report, Twitter reiterated that bot and spam accounts account for less than 5% of its users. The company has repeated this claim since 2013, which is central to its case to compel Elon Musk to honor his part of the deal to buy the company at $44 billion.

Earlier this week, the social media giant won the saga’s first round as a Delaware judge set the trial to start in October, contrary to Elon Musk’s request to push it back to February 2023 for a proper review of Twitter bot data.

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