Twitter revenue has dropped one percent for three months, a drop that Twitter blames on the uncertainty around Elon Musk’s chaotic takeover bid for the social media platform.
The social media company said revenue for three months up until June 30 was $1.18 billion, which is a decline of 1 percent from the same period last year.
Twitter said it reflected as well “advertising industry headwinds associated with the macro environment” as well as “uncertainty related to the pending acquisition of Twitter” by Musk.
Twitter also revealed the costs that were related to Musk’s bid ran to $33 million in the quarter.
Musk now wants to abandon the deal. The world’s richest person has pulled out of the deal, blaming that there is uncertainty over the number of spam or fake accounts on the platform. Twitter has filed a lawsuit against Musk demanding that he goes ahead with the agreed-upon deal as per a legal agreement signed in April.
Higher costs also helped push Twitter into a net loss for the three months to June 30 compared with the net income of the same period last year, which was $66 million.
Musk’s bid of $44 billion overshadowed the results, and Twitter decided not to put forward executives for a results conference because of the takeover bid.
Twitter is not the only social media platform having a bad quarter. Shares in Snapchat’s parent company fell 25 percent after it confirmed investors’ fears of a slowdown in advertising revenue for social media firms.
Spachat’s quarterly results showed a grim picture of how a weakening economy affects social media companies. The platform declined to make a revenue forecast in an “incredibly challenging” condition.
The social app generates more than two-thirds of its revenue in North America. Snap said that some advertisers were facing supply-chain disruptions, as well as labor shortages. Others were contending with rising costs within skyrocketing inflation, meaning advertising spending had to be slashed.
The revenue for Snapchat in the second quarter ending June 30 was $1.11 billion, falling short of analyst expectations, which were at $1.14 billion. This pushed its shares down by a quarter to $12.33.
Tech stocks have been hit massively this year with rising inflation combined with interest rate increases. Investors are expecting the slowest-ever pace of growth for social media ad revenue this year.
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