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Twitter Added 8.8 Million New Users in Q2 Amid Elon Musk Takeover Battle, Now at 237.8 Million DAUs

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Twitter reported disappointing second-quarter sales on Friday, another blow to a company that is already fighting a high-profile legal battle with Elon Musk over the fate of the social network.

Revenue fell 1 percent in the quarter from a year earlier, its first annual decline since the middle of the pandemic in 2020. Sales totaled $1.18 billion (nearly Rs. 9,400 crore) in the quarter, which fell short of the $1.32 billion (nearly Rs. 10,500 crore) analysts estimated. The company said “advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter” were factors in the disappointing results.

Twitter added 8.8 million new users during the quarter, in line with analysts’ estimates.

It’s unclear how much Friday’s earnings report truly means to investors while the company’s fate remains in limbo. Until two weeks ago, Twitter was set to sell the company to Musk for $54.20 (nearly Rs. 4,300) per share, making its financial reports little more than a formality as it awaited the deal to close.

But Musk tried to back out of the deal on July 8, claiming Twitter hasn’t been forthcoming with information on the number of fake accounts running rampant on the site. Twitter reiterated in its earnings release on Friday that it believes false or spam accounts make up less than 5 percent of its total user base, a claim that Musk has repeatedly questioned.

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Both sides are preparing for a trial, expected in October, during which Twitter will ask a judge to force the Tesla chief executive officer to honour his purchase agreement to buy the company for roughly $44 billion (nearly Rs. 3,51,300 crore).

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“This makes the investment case for Twitter hard to make at this point,” wrote Truist Securities analyst Youssef Squali after Musk’s announcement. Truist estimated that the shares could trade “in the high $20s (nearly Rs. 1,600)” if the deal falls through.

If the deal does fall through, Twitter’s business could be in trouble. The company previously set a goal to reach 315 million daily users by the end of 2023 and boost revenue to $7.5 billion (nearly Rs. 59,900 crore) annually by the same period. Currently, Twitter isn’t on track to meet the user goal. It reported 237.8 million average monetizable daily active users in the second quarter.

Like many of its social media peers, Twitter is also facing a major slowdown in advertiser spending and increasing competition from TikTok for viewers. Snap foreshadowed the difficulties in the industry on Thursday when it reported disappointing sales, citing advertisers slashing budgets more than expected due to the global economic uncertainty, but also increased competition for dwindling marketing dollars.

Twitter shares, which fell initially after Snap’s results, were little changed at $39.68 (nearly Rs. 3,200) Friday morning in New York. They are down almost 9 percent this year.

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Twitter’s net loss was $270 million (nearly Rs. 2,200 crore) in the quarter, or a loss of 35 cents a share. That compares with net income of $66 million (nearly Rs. 500 crore) and earnings per share of 8 cents in the same period a year earlier.

Twitter isn’t holding an analyst call to discuss earnings, and only published a short press release with minimal detail compared with its usual shareholder letter. In the previous quarterly results in April, Twitter withdrew its earlier outlook and said it wouldn’t provide forward-looking guidance.

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Elon Musk’s Twitter Deposition Rescheduled for October 6-7, 10 Days Ahead of the Trail

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Elon Musk’s deposition by Twitter lawyers has been rescheduled from this week to October 6-7, just 10 days before a trial over his bid to walk away from the $44 billion (nearly Rs. 3,59,600 crore) takeover, and the delay could play in the social network company’s favour.

The deposition of the world’s richest person was originally scheduled for this week but sources close to the litigation on Monday said that the timing of the interview was always subject to change given the fast-tracked nature of the litigation.

The two sides are conducting dozens of depositions and reviewing thousands of documents and communications in preparation for the five-day trial starting October 17 in Wilmington, Delaware.

Brian Quinn, a professor at Boston College Law School, said that the timing of depositions matter, and Twitter might be better off delaying the interview of Musk until after they have obtained his communications.

“You’re gonna delay your best witnesses for the end, as much as possible, so you have all the discovery,” Quinn said.

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Later on Tuesday, Twitter will ask Chancellor Kathaleen McCormick to punish Musk, who is chief executive of automotive company Tesla, for his legal team’s alleged disregard of court orders to turn over Musk’s messages about his decision to end the deal.

Musk’s response to Twitter’s motion was filed under seal. His lawyers have said in the past that the social media company was accusing Musk of withholding documents and messages to distract the court from the company’s own discovery abuses.

Musk’s deposition is expected to be a key part of the litigation. In past testimony, he has been combative under oath.

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Twitter’s attorneys are expected to try to show that Musk abandoned the deal due to falling financial markets.

Twitter wants McCormick to order Musk to close the deal at the agreed price of $54.20 (nearly Rs. 4,400) per share. The billionaire is seeking a ruling that Twitter violated the deal agreement by withholding critical information about users, allowing Musk to walk away without penalty.

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Elon Musk’s Lawyers to Argue With Twitter Attorneys Over Information Exchange

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A Delaware judge is hearing arguments over the exchange of information by lawyers for Twitter and Elon Musk in a lawsuit in which the social media giant is seeking to force Musk to carry through with his $44 billion (nearly Rs. 3,59,600 crore) acquisition of Twitter.

Tuesday’s hearing comes three weeks before a scheduled trial in the lawsuit.

Musk, the world’s richest man, agreed in April to buy Twitter and take it private, offering $54.20 (nearly Rs. 4400) a share and vowing to loosen the company’s policing of content and to root out fake accounts. In July, Musk indicated that he wanted to back away from the deal, claiming that Twitter had failed to provide him enough information about the number of fake accounts on its platform.

The hearing will begin with arguments on a motion by Musk’s attorneys to revise their answer to the lawsuit and their counterclaims against Twitter for the second time. Musk’s attorneys want to add information regarding a severance agreement and $7.75 million (nearly Rs. 63 crore) payment to former employee Peiter “Mudge” Zatko. Musk’s attorneys assert that Twitter needed his consent before making the payment but failed to do so.

Zatko is a cybersecurity expert who was the head of security for Twitter until he was fired early this year. He filed a whistleblower complaint in July with Congress, the Justice Department, the Federal Trade Commission and the Securities and Exchange Commission. The complaint outlines a host of accusations against Twitter, including that CEO Parag Agrawal and other senior executives and board members have made false and misleading statements about Twitter’s cybersecurity, privacy and integrity.

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Twitter attorneys argue that the inclusion of information about Zatko’s severance should be conditioned on Musk attorneys turning over records of all communications since December among Musk, his advisers and co-investors that involve Zatko.

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The judge will also hear arguments on several other disputes regarding discovery, or the exchange of information, between attorneys for Musk and Twitter. They include efforts by Musk lawyers to obtain more data from a sampling of about 9,000 Twitter accounts in the fourth quarter of 2021, and claims that Twitter is withholding too much information as “privileged,” or confidential. Musk attorneys also claim that Twitter is improperly withholding information regarding user metrics.

Attorneys for Twitter, meanwhile, are asking the judge to sanction Musk attorneys for failing to produce responsive phone messages, and to order them to comply with a previous discovery order.


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Facebook, Instagram Integration Improved With Deeper Account Centre Integration by Meta

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Facebook and Instagram are set to offer better integration as parent company Meta announced it is testing a deeper integration across both platforms. The firm has revealed two updates that include a new user interface for the Accounts Center feature across mobile and Web platforms, and a redesigned login and onboarding experience on its mobile apps. The tests include two new features that are intended to make it easier for users to switch between and create new accounts and profiles on Facebook and Instagram. The company is also testing allowing users to receive notifications for both Facebook and Instagram profiles in the same place.

In an announcement on its blog, Meta revealed that the new interface is currently in testing and allows existing users who have added their Instagram and Facebook credentials to the same Account Center, to switch between the two apps without navigating to their phone’s home screen, multitasking menu, or app drawer. Meanwhile, a redesigned mobile login and onboarding experience being tested allows iOS and Android users to sign in or create multiple accounts from a single Instagram or Facebook credential.

Meta also confirmed that existing security features will continue to apply to the updates that include blocking unrecognized devices from using interoperating login credentials for Instagram and Facebook accounts that have the two-factor authentication feature turned on for either of the accounts.

Users will also be notified of any account activity across Facebook and Instagram accounts on a single Accounts Center section including the creation of a newly linked Facebook or Instagram account, according to the company.

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Meta says it is now testing the new user interface on iOS, Android, and the Web while the login and onboarding workflow redesign is being tested on iOS and Android. The company adds that both features are being tested across the globe. The new features are “currently limited to Facebook and Instagram,” Meta said.

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The updates have arrived post the introduction of Meta accounts in August of this year and a recently reported downturn in both revenue and user growth for the American social-media giant.


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