Twitter Inc on Friday blamed its ongoing battle to close its $44-billion acquisition by Elon Musk and a weakening digital advertising market for a surprise fall in quarterly revenue and a net loss.
The results come as Twitter has sued Musk for dropping his offer to buy the company, and is now preparing for a legal showdown in a trial set to begin in October. The deal uncertainty has worried Twitter’s advertisers and caused chaos inside the company.
“Twitter is now in the unenviable position of convincing advertisers that its ad business is solid regardless of how its court battle with Musk ends, and its Q2 earnings show that the platform has its work cut it out for it to do that,” said Jasmine Enberg, principal analyst at research firm Insider Intelligence.
Twitter shares opened flat at $38.90 on Friday.
The company’s stock is dependent on the potential outcomes of the trial, and its financials are not moving the needle for investors, said Dan Ives, an analyst at Wedbush Securities.