and here to talk more about this al route senior writer for barons,
what do you make of twitter's results this quarter and
we should also note where the stock is right now.
It looks like it's trading lower in premarket about 1.42% lower.
It closed down just fractionally about 2/10 of a percent.
Yeah.
You know,
I almost want to be uh you know Mr Smart guy who cares about Twitter earnings, right?
Because they were awful snap was a disaster snapped down about 30%.
The whole social media space is down based on snap.
Um You point out twitter was was a big shortfall,
but all we care about with twitter is the trial.
So you know, what do we learn?
We learn that advertisers are facing the slowing economy and the weakest
among us with respect to snap are being hit the hardest.
Twitter is probably the second weakest hand in the social media space.
But they have this,
they have an ace up their sleeve which is the Delaware
Court and forcing Elon Musk to buy them at 54,
20 a share.
Yeah, exactly.
And we mentioned the stock and how it's trading today is down 40% over the past year.
So in your mind,
what exactly could twitter do at this point to get the stock back up and show
investors it's still worth their investment that as
investors be beyond Elon musk and this dog,
a we've been covering so heavily,
you know what's interesting um you know, Soapy rag I believe is the first time ceo,
I don't think he had been in in the job very long before, uh, the, the musk saga began.
Um, so, you know, we never really, I don't feel like we knew,
you know what his strategy for improving the value of the asset was right.
You know, they need to better monetize their daily user base,
they need to grow their daily user base.
Um, you know, back when, before Ellen had started talking about the bots, you know,
he had some very compelling ideas.
You know, he had likened it to um, Weibo in china and talked about payments,
platforms and, and increasing engagement.
So, you know, it feels like, you know, they have, you know,
a quarter of a billion active daily users, which, which seems like a lot.
Um, but exactly how they're going to improve things.
It's, it's just, it's just, you know, there's Elon's ideas,
we don't really know what the board was ever gonna do
or parade was going to do under his new leadership.
Um, so, you know, it's just in this, this, this weird uh, stasis right,
where basically, you know,
this is one of the reasons that the judge fast tracked the trial because, you know,
you can imagine that their business is going to be hurt by this, this drama.
So what can they do?
I think the first thing they can do is settle
this Ellen issue
and then lay out the path
for, for better monetization of their user base
and it really doesn't sound good when you put it that way because
that means they're in limbo until potentially october for this trial date.
Um, but you make a good point in the fact that there were, you know,
some strategies that were halfheartedly put forth maybe hesitantly,
especially as they were getting news that
they were potentially going to be acquired and
then those kind of went on the back burner in the last earnings report,
last announcement.
So it doesn't bode well for twitter investors, but also twitter's work course,
I do also want to talk about something you mentioned with social media broadly snap,
citing a slowdown in advertising revenue as marketers are pulling back on spending
talk more about how twitter experienced that slowdown as well.
And was there any silver lining in the,
in the earnings report about twitter weathering the storm
maybe because they do have a more established base and to
your point snap is kind of the weakest among us.
Well, um,
that's a good question, right. I would expect to see
the impact of the weakening economy sort of cascade from the strong to the weak.
So, um, you know, just off twitter missed sales and ebit expectations.
Um, so, and, and uh, and average daily users fell year over a year.
Um, so, you know, you might make the argument, it was all sort of better than feared.
It certainly looked better than snap. Um, but the same trends were at work
and for investors broadly speaking, you know, it's just an interesting idea of,
you know, these are, you know, asset light, you know,
tech companies that like to think of themselves as consistent growers.
That's not necessarily the case with,
with um,
with twitter, but you know, in this sort of slowing economy, you know,
that we're all worried about in slowing consumer spending.
Um, you know, the impact of a good old fashioned advertising recession.
What we're seeing in the numbers is something interesting to consider,
but you know, the silver lining to your original question,
it's better than snap.
I don't know if that's a silver lining, but that's the silver lining.
Yeah, not quite the hit that snap is experiencing.
I think snap is down about 30 30% in premarket twitter is down about 1.64%.
So I don't know if investors are still digesting this.
Maybe just waking up to this news.
If we see this trajectory move lower over the course of the day,
we'll continue to watch that.
I do want to circle back to this battle ahead
with Elon musk obviously you don't have a crystal ball,
but do you have any sort of indication about what the path looks
like moving forward for twitter and either side of what happens here.
So either maybe this settles out of court.
Elon musk eats this breakup fee, I believe twitter has one on their side as well
how that impacts the company moving forward or you know, if not,
it's harder to detail what could happen with this potential feature,
but Elon musk does potentially have to move forward with acquiring twitter.
That could also potentially be an option, right?
Yeah.
How, how wild would that be that, you know, Twitter shareholders end up with $54.
Um, so we're all amateur lawyers now. Right.
So it's the Delaware chancery court, we've learned that and we,
we now know what specific performance clause is in merger agreements means.
Um, you know, it's the two most powerful firms on Wall Street.
You got Wachtel on the side of
twitter, you got
Skadden, Arps on the side of musk.
They're both making arguments, Twitter won the first battle with the timing.
Yes.
You know,
I think everybody is completely and utterly guessing.
I mean that in the, in the nicest possible sense, what do I think would happen?
I've listened to people, I respect like Kara swisher,
the tech reporter from formerly from the new york times and analysts,
everybody says like, you know,
settlement makes the most sense like a lower price
for musk or a giant breakup fee paid to twitter
for this for the pain that Ellen has inflicted on the business.
Um, so that's sort of like in the ether, but I think that's a guess.
I don't think, you know,
that's based on where twitter's at or anyone
who's talked too much because I think that's actually
very difficult to get a sense directly from
the source of what he's thinking or feeling.
Um, you know, I can, I can tell you from my own Tesla coverage, You know,
he's always made statements like if I feel like I'm right,
I will litigate it to the ends of the earth and if I feel like I'm wrong,
I will, you know, pay and make amends. You know, he's made this such a statement.
So you know, if you,
if you believe that he feels like he's right with this pot issue and you know,
the sort of narratives that it was just buyer's
remorse aren't actually what's in his heart and he's probably
going to litigate this to the ends of the earth
and maybe settlement is not the way it goes.
Um,
all said
they gotta settle, right, this is just a mess.
Just pay them billions of dollars and move on.
Um, I know that, you know, from a Tesla perspective,
I think Tesla investors just want this overhang gone and they would welcome
any sort of settlement or resolution short of actually buying the whole thing.
Yeah, I think not only Tesla investors,
but also other companies associated with Elon musk,
we know with SpaceX there's been an uproar and backlash from employees over
the distraction that this has provided for his other companies as well?
Last question for you because you do bring up the box,
did we get any new information from twitter on that front in terms of spam
and bought users?
Good question.
So I've been through the release uh you know, it's funny,
so they don't have a conference call because there's so much going on.
So they just gave us the numbers. I don't think so. I don't think so.
I think, I think they're sticking with the 5%.
And actually it, you know, again, killing junior lawyer.
If they were to say anything, you know, their their lawyer probably would have,
you know, put a big red line through that in the press release and said no, no,
we're not going to say anything until the trial.
So I don't think we got an update,
At least not one that I was aware of. So 5% is where they are on the box.
They're sticking with that. That's all root. Senior writer for Barons.