Twitter''s first quarterly financial report for 2022 has been released. It claims that despite Q1 revenue, the company remained at its lowest level. Perhaps even more interesting is that the company admitted to accidentally overinflating daily active user accounts. The error prompted a redesign of its user accounts.
"We launched a program that allowed people to link multiple accounts together in order to have a convenient switch between accounts in March of 2019. "An error was made at the time, such that actions via the primary account resulted in a mDAU count. This resulted in a mDAU overstatement from Q1''19 through Q4''21.
Twitter''s stock is down about 25% YoY and by more than 31% since it reached its highest level last July.
The mDAU recast only produced a difference of about two million users for Q4 20221, but it will be interesting to see how Elon Musk handles this news. Twitter has just accepted the proposal, but the deal still has legal hoops to jump through and stockholder approval. Twitter was not open to an initial bid of $41 billion and was prepared to defend against a hostile takeover.
One might wonder if Twitter knew about this "error" before the agreement was struck, and if it does only admitting it to shake Musk off its back. However, the recast does devalue the company, implying that the ball is now in Musk''s court as to whether or not to proceed. However, as far as Twitter is concerned, it is still deal-on.
"We agreed on a contract to be purchased by an entity owned by Elon Musk for $54.20 per share in cash,," said the media. Upon completion of the transaction, Twitter will become a privately owned company."
Twitter reported a $128 million operating loss for the first quarter. Compared to Q1 2021''s $54 million increase, that figure was a 337 percent decrease in growth. This is despite revenue being up 16 percent year over year. Twitter also blames it on a 35-percent increase in operating expenses.