Twitter blames Musk Buyout “Uncertainty” as the reason behind missing Q2 earnings records

Friday saw the release of Twitter Q2 2022 financial results, which showed lower-than-expected figures for sales, earnings, and customer growth. The company attributed some of the reasons for the slowness to Tesla CEO Elon Musk for causing uncertainty about their acquisition agreement.

According to a recent press release, the company’s sales fell by 1% from the previous year to $1.18 billion. According to a Refinitiv survey of analysts, $1.32 billion in revenue was expected.

On the one hand, Twitter’s total inflows, which largely consist of advertising money, increased by 2% during that time. This was more than offset by a 27% decline in subscription and other revenue, which was mostly brought on by Twitter selling MoPub to AppLovin.

In addition, over $1.5 billion was spent last quarter on costs and expenses, of which $33 million was tied to a planned acquisition for the business in Q2. Additionally, even if the number of monetizable daily active users increased to 237.8 million in Q2 2021, a 16.6% increase, it was below analysts’ expectations of 238.08 million.

The social media giant recorded a net loss of $270 million, marking a net margin of -23 percent and diluted EPS of -$0.35.

According to Twitter, the decline in income can be attributed to “headwinds in the advertising industry related to the macroenvironment” as well as “uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”

Due to the impending purchase agreement, Twitter also stated that it would neither hold an earnings call nor send a shareholder letter regarding its Q2 earnings.

Musk and Twitter on a legal fight

Interestingly, as TheCoinRise reported, Elon Musk recently decided to revoke his April-signed $44 billion acquisition agreement with Twitter. The former alleges the latter has not given him meaningful information about the problem of spam bots being prevalent on the platform, a problem he has stated he wants to address when in control.

Notably, the social media giant was required to give Musk all the information he needed for transaction-related business objectives under the terms of the merger agreement between the two companies, which was signed on April 26.

The stock of Twitter decreased slightly over the weekend as a result of Musk’s change of heart, but it is still much below his $54.20 per share buyout offer.