Twitter blames Elon Musk for his lower-than-expected income. According to Twitter, if Elon Musk was not present and planned to buy Twitter, Twitter’s revenue would be slightly larger.
This is what Twitter said in its second-quarter earnings release. Quoting The Verge, Sunday (24/7/2022), Twitter accused Elon Musk of being a factor that made his income drop from USD 1.19 billion (Rp 17.8 trillion) to USD 1.18 billion (Rp 17.6 trillion).
Still, the inclusion of Elon Musk isn’t the only reason Twitter is facing revenue problems. The company also cited problems with the advertising industry and general economic conditions.
“Uncertainty regarding the pending acquisition of Twitter by an Elon Musk affiliate is the most specific issue for Twitter,” said The Verge.
Previously in April 2022, Elon Musk bought Twitter. A few weeks later, Elon Musk withdrew from the agreement.
The richest man in the world has officially filed for the termination of the Twitter acquisition deal to the Securities and Exchange Commission. Now, Twitter and Elon Musk will go to court in October.
Through the courts, Twitter attempted to “force” Elon Musk to proceed with the acquisition of Twitter at a price agreed upon from the start.
For your information, Elon Musk in April offered Twitter for USD 44 billion or equivalent to Rp. 658.9 trillion. This value is equivalent to USD 54.20 per share.
Unfortunately, the acquisition decision seems to actually make it difficult for Twitter to sell ads. Bloomberg previously reported that Twitter was trying its best to calm advertisers’ concerns about how Elon Musk could change the microblogging platform.
Advertising firm Ad Age recently reported that the drama about the Twitter acquisition has thrown the company’s ad sales into a “mess.”
It said Twitter ad sales were up 2 percent year-on-year, even if overall revenue had fallen. Even so, Twitter still needs to increase revenue from selling its ads.
Moreover, Twitter reported a net loss of USD 270 million, down from a profit of USD 66 million in the same quarter last year.
Last year, Twitter’s revenue grew 74 percent over the previous year. Meanwhile, this year it is shrinking.
For your information, Twitter currently has 237 million daily users. That’s up from 229 million daily users in the last quarter. It is suspected that this increase in the number of users is due to “continuous product improvement.”
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Previously, Elon Musk canceled the purchase of Twitter. This makes Twitter take legal action. The social network also sued Elon Musk, Tuesday (12/7/2022), for violating the agreement worth USD 44 billion (Rp 659 trillion).
Citing Gizchina, the company also asked a Delaware court to order the world’s richest man to complete the Twitter acquisition.
“Elon Musk appears to believe that unlike other law-abiding parties, he is free to change his mind, destroy the company, disrupt company operations, destroy shareholder value and walk away,” Twitter said in a statement. complaint documents submitted to the court, as quoted from Reuters, Wednesday (13/7/2022).
The lawsuit is considered one of the biggest legal battles in Wall Street history. Because the lawsuit involves one of the most flamboyant entrepreneurs in the business world.
Earlier, last Friday, Elon Musk said he was ending the deal with Twitter because the social network was deemed to have violated the agreement.
According to Elon Musk, Twitter failed to respond to requests for information about fake accounts or spam on its platform. In fact, according to the Tesla boss, this information is the basis of Twitter’s business performance.
Reuters said Elon Musk, who is also the boss of SpaceX, did not immediately respond to a request for comment on Twitter’s lawsuit in a Delaware court.
For your information, Twitter’s lawsuit accuses Elon Musk of violating the merger agreement and “disrupting Twitter and its business”.
Twitter said it was the first time the number of layoffs had increased since the deal with Elon Musk was announced.
Twitter also accused Elon Musk of secretly accumulating shares in the company between January and March without disclosing his substantial purchases to regulators. Twitter says Musk continues to “unwisely” accumulate Twitter shares in the market.
For your information, the value of Twitter shares closed at USD 34.06 on Tuesday, up 4.3 percent, but still much lower than the share value that Elon Musk agreed to buy Twitter last April. At that time, Elon Musk agreed to buy Twitter for a value of USD 44 billion or equivalent to Rp. 54.2 per share.
Elon Musk said he stopped acquiring Twitter due to a lack of information about spam accounts and this he considered a material loss. Elon Musk also said the executive’s departure was Twitter’s failure to run the business.
Twitter said it did not share more information about spam accounts with Elon Musk out of concern that Elon Musk would build a rival Twitter platform after canceling the acquisition.
For this, Elon Musk also called what Twitter was doing was inappropriate. Elon Musk also said his decision to stop acquisitions was related to the decline in share values, especially for technology company shares.