Twitter has announced positive quarterly profits on Thursday after both their revenue and user count have been steadily rising over the past few days following Elon Musk’s announcement.
The company reported a net quarterly income of $513 million, 61 cents a share. This number might be, to some degree, inflated due to the sale of their MoPub business however.
Revenue ad sales jumped almost 16% in the three months following up to March versus their first quarter in 2021. In their report however Twitter stated that the figure was a refection of “headwinds associated with the war in Ukraine.” The website also received 14 million users over last quarter, a massive jump in engagement.
However as things stand the smaller details of their current business performance are unknown. The company has recently canceled their scheduled conference call with industry analysts and executives that would have showcased their quarterly results, so not much is known currently.
“Given the pending acquisition of Twitter by Elon Musk, we will not be providing any forward looking guidance, and are withdrawing all previously provided goals and outlook,” the company stated in their report.
Although Musk’s deal to purchase the company was announced this week, and will close before October of this year, shareholders and foreign regulators will have to accept the deal before any changes in ownership can be made. As things stand however, there are no massive hurdles standing in the way of the deal other than Tesla’s stock value dropping.
“We see little reason to believe Twitter could extract greater shareholder value remaining public,” said Angelo Zino, an analyst at CFRA. He believes these positive growth trends combined with the growing problems in the online advertising industry will guarantee the acquisition’s success.
The current difference between Musk’s deal price and Twitter’s share price of $49.11 displays investor uncertainty in regards to the deal’s completion, according to former CEO of Baxter International Harry Kraemer. Kraemer is now a professor at Northwestern’s Kellogg School of Management.
One of the biggest concerns in regards to the deal is its unorthodox nature. It’s not everyday someone purchases a mega-corporation.
The other major fear in regards to the deal is the fact that there is a chance for Musk to back out of it, even with the $1 billion fee he’ll have to pay as a result of this.
Twitter as a company has struggled to pose a profit since it’s gone public in 2013. Musk’s potential acquisition means the company has a chance to go private, giving it an opportunity for it to focus less on stock prices and short-term profits.
John Meyer, a famous technology investor, told the Associated Press this week: “I think there is nothing better for Twitter than Elon Musk buying it and ideally replacing the board, and also doubling down on investments into products and new revenue-generating sources.”
See also from Business News:
