Social media company, Twitter has released its Q2 2022 financial result with Elon Musk featuring prominently. In the financial report, the company said it spent $33 million on the ongoing Musk’s acquisition deal, which is now a subject of litigation.
The result shows that Twitter’s monetizable daily active users (mDAUs) increased 16.6% year-on-year to 237.8 million; however, this fell marginally short of estimates, which were pegged at 238.08 million.
The company’s Q2 revenue stood at $1.18 billion, down by 5% from the previous quarter and 1% from the corresponding period last year. This, according to Twitter, reflects “headwinds’ in the advertising industry related to the current economic environment, while it also pointed to “uncertainty” caused by Musk’s attempts to pull out of the deal.
What the company is saying
- Presenting its costs for the quarter, Twitter stated: “Costs and expenses totalled $1.52 billion, an increase of 31% year-over-year. Costs related to the pending acquisition of Twitter were approximately $33 million in Q2, while severance-related costs were approximately $19 million in Q2.”
- “Given the pending acquisition of Twitter by an affiliate of Elon Musk, we will not host an earnings conference call, issue a shareholder letter, or provide financial guidance in conjunction with our second quarter 2022 earnings release,” the company added.
- While giving update on the acquisition deal, the company in the financial report stated: “As announced on April 25, 2022, we entered into a merger agreement, pursuant to which Twitter agreed to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash. Upon completion of the transaction, Twitter will become a privately held company.
- “On July 8, 2022, representatives of Mr. Musk delivered a notice purporting to terminate the merger agreement. Twitter believes that Mr. Musk’s purported termination is invalid and wrongful, and the merger agreement remains in effect. On July 12, 2022, Twitter commenced litigation against Mr. Musk and certain of his affiliates to cause them to specifically perform their obligations under the merger agreement and consummate the closing in accordance with the terms of the merger agreement.
- “On July 19, 2022, Twitter’s request for an expedited trial was granted, and the trial is being scheduled for October 2022. Adoption of the merger agreement by our stockholders is the only remaining approval or regulatory condition to completing the merger under the merger agreement. The exact timing of completion of the merger, if at all, cannot be predicted because the merger is subject to ongoing litigation, adoption of the merger agreement by our stockholders and the satisfaction of the remaining closing conditions.”