Twitter publishes disappointing results, caused by its conflict with Elon Musk, according to the social network

Twitter, which is trying to get Elon Musk to keep its commitment to buy the social network, has seen its turnover decline over one year (-1%), to 1.18 billion dollars, according to the results quarterly published Friday July 22. It also fell back into the red, with a net loss of $270 million. Reported per share, an indicator closely followed by Wall Street, the loss is almost triple what analysts expected. This decline is attributed to “headwinds” in the advertising sector, fears weighing on the economic situation, but also to “uncertainty linked to the ongoing acquisition of Twitter” by Elon Musk.

“Twitter is in a rowboat in the middle of a storm,” commented Jasmine Enberg, analyst for Insider Intelligence, who recalled that the group was “used to poor performance”. In an environment of tightening credit conditions and an economic slowdown, companies whose model is entirely based on advertising are suffering from shrinking advertiser budgets. Thursday, Snap had thus opened the ball of social networks and posted a greater loss than expected and a turnover lower than expectations, which caused it to lose more than 39% on the stock market in the session on Friday alone.

Musk’s shadow hangs over the platform

On the Twitter side, analysts nevertheless welcomed the increase of 8.8 million in the number of daily active users called “monetizable”, that is to say exposed to advertising on the platform, for a total of 237, 8000000. “It’s better than feared and the numbers remain relatively strong considering the current environment,” reacted, in a note, Dan Ives, of Wedbush Securities. “Compared to Snap’s nightmare, we see that the ad hasn’t collapsed,” the analyst added. Against the current of other social networks, rolled on the stock market on Friday, Twitter action ended up 0.81%.

Beyond an unfavorable economic situation for the entire sector, Twitter is also weakened by the saga of its hypothetical takeover by Elon Musk. After the renunciation of the contractor, at the beginning of July, the file moved on the legal ground, where the leaders intend to obtain that the billionaire is forced to acquire Twitter. On Tuesday, a judge from a specialized court in Delaware (northeast) ordered a tight trial over five days in October. The magistrate thus acceded to Twitter’s request, which called for an accelerated procedure to limit the damage of this saga on the group, and dismissed, on the other hand, the arguments of Elon Musk’s lawyers, in favor of the debates not won’t open before 2023.

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The businessman accuses Twitter executives of lying about the proportion of automated accounts and spam on the platform and of not providing him with enough data for verification. The group has the blue bird disputes these assertions and accuses Elon Musk of using them to create a diversion. “The results (published on Friday) provide additional evidence that Elon (Musk) had a detrimental impact on the company’s fundamentals, which should strengthen Twitter’s position in court,” Angelo Zino said in a note. from CFRA Research. Many investors believe that Twitter has regained control, which has allowed its share price to rebound.

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It is now above its course on April 4, the day before the announcement of Elon Musk’s stake in the capital, the first step before the filing of an offer for the entire company, ten days later. However, the social network “now finds itself in the unenviable position of having to convince advertisers that its advertising business is solid regardless of the outcome of its legal battle with Musk”, explained Jasmine Enberg. As with the publication of the first quarter, Twitter did not organize the traditional conference call on Friday to present the results.

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