Twitter Blames Q2 Loss on Advertising ‘Headwinds’ and Elon Musk
By Movieguide® Contributor
As Twitter’s second-quarter revenue declined 1%, coming in short of Wall Street estimates, the company blames the loss on advertising industry headwinds and Elon Musk’s attempt to back out of his acquisitions deal.
Variety reports that Twitter’s Q2 revenues totaled $1.18 billion, down 1% year over year, whereas analysts expected Twitter to post $1.34 billion in revenue, which would have been a 10.5% growth year over year.
Twitter costs increased 31% in the second quarter, “leading to a $270 million net loss…compared with net income of $66 million in the year-ago period.”
The loss reflects “advertising industry headwinds associated with the macroenvironment” and “uncertainty related to the pending acquisition of Twitter” with Musk.
“Twitter and other social media companies with a heavy reliance on advertising have felt the weight of economic challenges, as fears around inflation, interest rate concerns, continued supply chain issues and the war in Ukraine led some advertisers and brands to adjust their ad spend,” CNBC reports.
Other tech companies face similar issues. Snap, the parent company of Snapchat, “reported Q2 earnings shy of already-reduced expectations, telling investors it would ‘substantially’ slow down hiring amid a revenue deceleration. ‘Demand growth on our advertising platform has slowed significantly.’”
Additionally, Twitter’s losses come amid the company’s legal battle with Musk. While Twitter demands he follow through on his $44 billion acquisitions agreement, Musk says he needs “verification of Twitter’s claim that fake and spam accounts are under 5% of DAUs [daily active users].”
Twitter’s lawyers claim that Musk has buyer’s remorse, and a judge in the Delaware Court of Chancery set an October trial date to hear the company’s case against Musk.
Like other companies that experienced Q2 losses, Twitter often promotes and enables immoral content, frequently censoring and banning accounts that attempt to speak the truth about cultural issues. While other factors influence its declining revenue, Twitter could promote or at least allow discussion the free discussion of ideas, which could improve its market value.
Movieguide® previously reported on Twitter’s lawsuit against Musk:
Due to Elon Musk’s recent decision not to pursue the purchase of Twitter, the major social media site filed a lawsuit.
The Tesla and SpaceX CEO initially planned to move forward with a $44 billion deal to acquire Twitter. However, Musk turned his back on the company after he alleged the company breached “multiple provisions” from their initial contract.
However, Twitter intends to proceed with the deal and ensure it in a court of law.
“We are committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plan to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” the Twitter Board told People Magazine.
Musk responded to Twitter’s lawsuit in a meme, ironically posted to his Twitter account.
“They said I couldn’t buy Twitter, Then they wouldn’t disclose bot info, Now they want to force me to buy Twitter in court, Now they have to disclose bot info in court.”
Previously, Musk said in a filing that Twitter failed to provide essential information regarding the platform’s fake accounts.
“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the filing reads.
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Now more than ever we’re bombarded by darkness in media, movies, and TV. Movieguide® has fought back for almost 40 years, working within Hollywood to propel uplifting and positive content. We’re proud to say we’ve collaborated with some of the top industry players to influence and redeem entertainment for Jesus. Still, the most influential person in Hollywood is you. The viewer.
What you listen to, watch, and read has power. Movieguide® wants to give you the resources to empower the good and the beautiful. But we can’t do it alone. We need your support.
You can make a difference with as little as $7. It takes only a moment. If you can, consider supporting our ministry with a monthly gift. Thank you.
Movieguide® is a 501c3 and all donations are tax deductible.
