Twitter claims it increased active users between 2019 and 2021 due to a “bug”.
facepalm: Elon Musk’s acquisition of Twitter is still undecided, and the company’s first-quarter financial results could dampen the mogul’s enthusiasm for the deal. In addition to significant negative growth, Twitter admitted that it made a mistake that caused the number of users to be higher than the actual numbers for the past three years.
Thursday twitter released its first quarterly financial report for 2022. It claims that despite first-quarter revenue reaching $1.2 billion, the company was operating at a loss. Perhaps even more interesting is that the company admitted to accidentally inflating the number of monetized daily active users (mDAUs). He blamed the mistake on changing the way user accounts were managed.
“In March 2019, we launched a feature that allowed people to link multiple separate accounts together to conveniently switch between accounts,” the report says. “A mistake was made at the time, such that actions taken through the master account resulted in all associated accounts being counted as mDAUs. This resulted in an increase in mDAU from Q1’19 to Q4’21.”
The mDAU revamp only changed about two million users in the fourth quarter of 2021, but it will be interesting to see how Elon Musk handles the news. The billionaire just offered to buy Twitter for $46.5 billion. Twitter accepted the offer, but the deal still has legal hurdles to overcome and get shareholder approval. Twitter did not agree to the initial $41 billion bid and prepared to defend against a hostile takeover.
Presumably, either party can still opt out of the acquisition, which makes one wonder if Twitter was aware of this “mistake” before the deal was made and only admits it to shake Musk off his back. Of course, such tactics would be unethical at best and illegal at worst. In any case, the rework does devalue the company, which means that now the decision on how to proceed is on Musk’s side. However, as far as Twitter is concerned, it is still under discussion.
“As announced on April 25, 2022, we have entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk for $54.20 per share in cash. Once the deal is completed, Twitter will become a private company.”
Twitter also reported an operating loss of $128 million for the first quarter. Compared to a profit of $54 million in the first quarter of 2021, that figure represents a 337 percent drop in growth. This decline also comes despite the fact that revenue grew by 16 percent year on year. Twitter blames this on a 35 percent increase in operating costs.
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