Twitter blames Musk as it tumbles into the red
TWITTER sought to shift blame for a dismal set of results on to Tesla boss elon Musk amid the ongoing legal battle around the billionaire’s on-off purchase of the social media website.
The group attributed a 1pc drop in revenue to £985m in the second quarter to ‘uncertainty’ surrounding Musk’s £37bn takeover bid and ‘headwinds’ in the advertising industry.
Twitter swung to a loss of £287m in the three months to the end of June, having made a profit of £25m in the same period last year.
it said the disappointing results reflected ‘advertising industry headwinds associated with the macro-environment, as well as uncertainty related to the pending acquisi
‘Twitter is in a kind of purgatory right now’
tion of Twitter by an affiliate of elon Musk’.
Twitter refrained from providing guidance for the year ahead and did not hold calls with analysts due to its ‘pending acquisition’ by Musk.
The shares rose 1pc to $39.70 on wall street following the results, leaving them well below the $54.20 offered by Musk.
The lacklustre figures came as Twitter remained locked in a bitter legal battle with the Tesla billionaire over his purchase of the company.
Musk, the world’s richest man, attempted to back out of the deal earlier this month by claiming that Twitter had failed to uphold its side of the merger agreement by not disclosing enough information on fake accounts.
But the company is now suing to force him to complete the deal, with its lawyers having accused the billionaire in court filings of ‘attempted sabotage’.
it has acquired the services of wachtell, Lipton, rosen & Katz, a New York law firm considered one of the best in the world for litigating disputes when mergers and acquisitions turn sour. Twitter scored an early victory in the tussle this week after a Delaware court ruled that an expedited fiveday trial could take place in October.
The decision was a blow to Musk, whose lawyers had asked for the trial to take place next February.
Twitter also has the backing of some analysts on wall street, who have concluded the social media firm will triumph.
earlier this month, analysts at broker wedbush said Twitter had a ‘strong, iron fist upper hand’ in the dispute, noting that many investors had concluded the legal battle ‘will result in some version of a Twitter win’.
it is expected that if he fails in his bid to back out of the deal, Musk will have to pay Twitter a substantial settlement for breaking the takeover agreement or even be forced to buy the platform for the agreed price of $54.20 per share.
Twitter spent £27m on the proposed deal between April and June as adviser fees stacked up.
its number of monthly daily users has risen to 237m.
Mike Proulx, at technology research company Forrester, said: ‘Twitter is in a kind of purgatory right now. The future of the company and the product is in question. Twitter now has an acquirer who no longer wants it, a chief executive and board who wants to get rid of it, and an employee base caught in the middle of it all as their morale plummets.’