• Tue. Feb 27th, 2024

Twitter Revenue Falls 40% As Interest Deadline Looms: Report

ByShanthi Rexaline

Jan 18, 2023
Twitter Revenue Falls 40% As Interest Deadline Looms: Report

The chatter on Twitter’s impact on Tesla, Inc.’s TSLA fundamentals could return following the surfacing of a new rumor.

What Happened:  Twitter’s revenue has declined 40% year-over-year, Platformer Managing Editor Zoe Schiffer tweeted late Tuesday, terming the revelation as a tiny scoop, without specifying the exact period. 

Before Musk bought Twitter, the social media platform’s revenue for the six months that ended June 30 rose 6.8% to $2.38 billion and second-quarter revenue was down about 1% to $1.18 billion.

Twitter, which customarily reports its financial results in late October, did not publicly release its earnings report after Musk took it private.

His takeover has put pressure on Twitter’s topline as most advertisers either paused for more clarity on policies and direction or fled the platform. Musk’s brashness and his political views, as well as his quest for free speech, led to the reinstatement of many banned accounts and further alienated advertisers. Most did not the link idea of their products show up alongside incendiary content.

Additionally, Twitter was also contending with industry headwinds of slowing ad spending amid economic softness.

Advertising accounted for about 91.5% of Twitter’s total revenue in the second quarter of 2022. On a Twitter Spaces session, Musk blamed advertisers, saying they expected high returns on investment on their ad spend.

See also: How Did Elon Musk Make His Money

Loan Deadline Looms: Schiffer also said that Musk’s first “giant interest” payment on the loan he availed for financing the Twitter deal is due at the end of the month.

Musk financed his Twitter deal with $31 billion in equity and $13 billion in leveraged buyout debt. About $3 billion of the $13 billion was an unsecured loan carrying an interest rate of 11.75%, according to Bloomberg. The report also suggested then that Twitter financiers, led by Morgan Stanley, were in talks to replace the high-interest-bearing part of the debt with margin loans.

Why It’s Important: Tesla shares plummeted 65% in 2022, with some of the negative sentiment attributed to Musk’s preoccupation with Twitter. The social media company was seen as a distraction from his focus on his flagship electric vehicle venture.

The rumor of Twitter woes comes when Tesla’s shares have begun to turn the corner.

On Tuesday, Tesla settled 7.43% higher at $131.49, according to data from Benzinga Pro.

Read next: Tesla Climbs Higher In This Charged Up Trend: Here’s What To Watch

 



Image and article originally from www.benzinga.com. Read the original article here.