Twitter said it spent more than $33 million in the second quarter of 2022 on the proposed acquisition it received from Elon Musk.
Musk’s acquisition is costing Twitter more than $30 million
This was revealed by Bloomberg citing data contained in the company’s latest quarterly report, which also reported that besides this expense, the deal generated no other financial movements.
After the April offer, accepted by Twitter, a confrontation opened between Musk and the company he wanted to buy.
Initially, in May, Musk had decided to suspend the purchase process, in order to have more time to examine in particular the data regarding the fake accounts and bots that are populating the social network.
Failing to collect enough compelling data in this regard, Elon Musk withdrew his offer in July and was later sued by Twitter.
This complex affair has generated many costs, especially legal ones, both to the company and presumably to Elon Musk himself, so much so that they are collectively quantified for now at more than 33 million for Twitter alone and only through June.
Thus, neither the expenses incurred so far by Elon Musk in producing and submitting this bid, and then withdrawing it, nor the costs after June 30, i.e., those related to the withdrawal of the bid and especially the ongoing lawsuit between Twitter and Musk, are counted in this figure. Therefore, it is entirely likely that they could rise even higher.
Theoretically, the lawsuit could already be concluded in October, should the judge rule in Musk’s favor, but even so, surely the costs at that point will have risen further.
Moreover, in the same quarter, Twitter claimed to have lost $270 million, of which only a little over 12% was due to Elon Musk’s failed acquisition. And this despite the fact that, by contrast, the number of daily active users increased by 16.6% compared to the same period last year.
Negative performance not only for Twitter during the last quarter
Although the company blamed Musk for these losses, it seems quite evident that the losses caused to Twitter by Musk are only a small portion of the overall losses generated by the company itself.
It is worth mentioning that many other companies, in some ways similar to Twitter, did not have a good second quarter in 2022, due in part to various external problems, including the difficult time the advertising market is going through.
The first quarter, on the other hand, did not seem to have gone badly, so much so that Musk’s proposed purchase came perhaps, and not coincidentally, in the very days when the company’s first quarter 2021 financial results were being released.
Then again, Tesla also had a bad second quarter in 2022, and it is possible that Tesla’s problems were among the reasons that prompted Musk to withdraw his offer once the quarter was over.