Whatever the story with Musk’s management of Twitter, there are some strange numbers and interpretations regarding revenue. If you search “Twitter+profit”, you get some odd-looking things.
Right at the top of the search are the results for the second quarter of 2022, showing revenue of $1.17 billion. OK. That’s $4.68 billion as an average for the year. The market, talking itself into its usual delusional expectations, marked down Twitter for missing expectations with a figure of 10.5% annual growth.
Now try finding a word anywhere online about Twitter’s profit. A Boolean search for “Twitter:profit” equates to this mishmash. There’s much hooha about operating costs and a buyback program, but “profit” is a hard word to find in relation to Twitter itself. In this Forbes article from February 2022 you’ll see two uses of the word, and one is in the header. You see far more about profit for investors from the stock price.
Charts aren’t much more informative. There are such things as charts showing Twitter profits, but you need to be patient to find any cohesion. From this wealth of equivocal non-information, you eventually get a somewhat blurry picture of the real numbers.
…That’s assuming there were no Nobel Prizes for Romantic Fictional Financial Journalism that decade. Billions in revenue, and only a few coy references to profits? How? Surely the dear little white-haired investors could have seen a buck or two?
I don’t buy a word of this. This is one of the biggest advertising platforms in the world. It’s premium ad space. That much ad budget money (it’s truly huge money) couldn’t be turned into a nice little piggy bank on just one sunny day in reporting season? Did Cinders and her pumpkin carriage get lost on their way to the bank?
Yes, there are operating expenses. There are also things called “budgets”, which despite the two syllables, are comprehensible to most people, even living ones. There’s a buyback plan, based on what specific need? Twitter stock has been sloshing around at best at the price of the early days after listing, and not much better.
Twitter announced a $4 billion share buyback in February 2022. Why bother? It obviously hasn’t done much for the stock price, and it’s worth more than a year’s actual revenue? Then fluently add operating costs, and surprise, surprise, no profit. Where would this money come from? From revenue? You don’t say? To go to whom? To achieve what, pray tell?
Someone should be praying. How was this monumental load of garbage so neatly overlooked by the market? There’s a strong smell of Essence of Rodent in this mix. Who’s been making money out of this hamster wheel of money cycling?
Stuff the ideology and social media’s high opinion of itself. Musk may be the only guy able to get some hard numbers from the Ouija board.
Postscript: It is more than likely that previous management had no idea of any of the other interpretations of this situation. They probably thought a buyback was a good if excruciatingly conventional idea to shore up the stock price. The bottom line is that the market coverage missed all of it. How, and why?
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
