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Here are 5 things we've learned so far from -2-

Twitter didn't elaborate further in its earnings release, nor did it hold a conference call, so investors are left to wonder how exactly the Musk dispute impacted the company's revenue. The company's legal filings and arguments hold some clues about what the company may mean. Lawyers argued in a written complaint that Musk's "derogation" of the deal close and his "repeated disparagement of Twitter" and its employees "create uncertainty and delay that harm Twitter and its stockholders" while opening the company up to adverse business effects.

At Tuesday's hearing, Twitter's legal team discussed employee unease due to uncertainty over the deal. It's possible that Twitter is having trouble retaining employees during a tumultuous period, or that turmoil around the deal is impacting the ability to roll out projects effectively and on time.

"It does seem like there's turmoil amongst employees and even among the board," said Carl Tobias, a law professor at the University of Richmond. "The future of the company just doesn't seem very clear."

A Twitter representative said that the company was not providing additional details on revenue performance beyond what was in the release.

Twitter also mentioned a tougher advertising backdrop as another reason for its revenue performance. Given building unease about the state of the ad market in the weeks leading up to Twitter's report and the dire signals sent by Snap earlier in the week, it's likely that ad-market challenges are more to blame for Twitter's top-line woes than the ill-defined Musk effects.

For more: Twitter has more to worry about than Elon Musk

But there could perhaps be a link as well: In a rocky climate for ad spending that's seen brands tighten their belts, marketers may be opting for safer platforms that aren't the source of controversy over bot activity.

-Ciara Linnane

 

(END) Dow Jones Newswires

07-25-22 1421ET

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