- There is a $1bn termination fee potentially at stake.
- The report covers the period from April to June 2022.
- Twitter has doubled down on its position on the amount of spam and fake accounts on the platform – the reason Elon Musk had given for terminating the deal.
- In 2021, Twitter’s revenue was $5bn (£4.2bn), but in the last 12 months, its share price has fallen by 45%.
Between April and June 2022, Twitter spent $33 million (£27 million) on Elon Musk’s proposed acquisition of the company as reported by BBC.
Pending acquisition
Additionally, it stated that there were now 237 million monthly active users, which was worse than expected.
Since then, Mr Musk has changed his mind about the acquisition, and Twitter is now pushing for the deal to go through, thus a court date has been set for October.
There could be a $1 billion termination fee at risk.
Twitter cited the “pending acquisition” as the reason for declining to comment on its most recent financial results.
The report is for the months of April through June 2022.
Spam & bogus accounts
Twitter has strengthened its stance on spam and bogus accounts, which Elon Musk cited as the cause for the deal’s termination.
Although it emphasised that the percentage was an estimate, it claimed, “We have done an internal evaluation of a sample of accounts and estimate that the average of fraudulent or spam accounts during the second quarter of 2022 constituted fewer than 5% of our [monthly active users] during the quarter.”
Twitter generated $5 billion (£4.2 billion) in revenue in 2021, but its share price has dropped by 45% over the past year. Forrester analyst Mike Proulx claimed that Twitter was in “purgatory.”
The personnel base at Twitter is “stuck in the middle of it all, with an acquirer who no longer wants it, a CEO and board who want to get rid of it,” he said.
“Twitter itself is the actual victim of all this turmoil.”
Growing costs
Snapchat’s parent company, Snap, announced earnings of $1.11 billion on Thursday, falling short of Wall Street forecasts.
After hearing the news, its shares fell by more than 25%.
In response to growing costs, it claimed that several of its advertisers had reduced their spending.
It also claimed that a modification implemented by Apple the previous year, which allowed iPhone and iPad users to choose not to have their location tracked by apps, had an impact on it.
Because internet companies can no longer observe their users’ other online activities and shape advertising accordingly, this has a negative impact on the personalization of adverts, a service that is extremely vital to them.
Twitter said that its ad revenue has climbed by only 2%, to $1.08 billion.
Next week, Alphabet, the parent company of Meta and Google, is expected to release its earnings.
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Source: BBC
