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Twitter faces additional worries from advertisers about the potential takeover by Mr. Musk, who has said he hates advertising and wants to relax Twitter’s content moderation policies, which have prevented ads from appearing alongside objectionable content.
The economic headwinds detailed by Twitter on Friday will not be a big worry to current shareholders if a court forces Mr. Musk to take ownership of the company at his proposed price of $54.20 per share.
“The funny thing is, earnings sort of don’t matter,” said Rich Greenfield, a co-founder of LightShed Partners, a research firm. “At the end of the day, if they sell the company at $54.20, it’s Elon’s problem, not the market’s problem.”
Twitter’s share price was $51.70 on April 25, the day the company’s board accepted Mr. Musk’s offer. But the stock has been heading downhill almost ever since, spending the past month below $40.
Investors will be concerned about Twitter’s revenue only if the deal collapses and the company’s business fundamentals regain their importance, Mr. Greenfield added. “If the deal fully falls apart, we know the stock would go down,” he said. “But the question is, ‘How much?’”
Mr. Musk has also accused Twitter of misleading investors and undercounting the inauthentic accounts on its platform. The company has said that those accounts make up fewer than 5 percent of the active users on its platform and that it uses experts to audit its count. Twitter reiterated this figure in Friday’s filing.
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