Elon Musk (Source = Yonhap News)

What is the secret behind Musk’s acquisition of Twitter to exceed expectations in the first quarter?

Elon Musk (Source = Yonhap News)

Twitter, the social media platform that Elon Musk, the world’s richest man, decided to acquire, surpassed Wall Street’s expectations in the first quarter of this year.

According to the economic media CNBC and Associated Press on April 28 (local time), Twitter recorded sales of $1.2 billion (about 1.5 trillion won) and net profit of 4 cents (about 51 won) per share in the first quarter.

Although sales fell short of the Wall Street consensus of $123 million compiled by financial information company Refinitiv, earnings per share were higher than Wall Street’s estimate of 3 cents.

Twitter has also succeeded in expanding its users. The number of monthly active users was 229 million, which is higher than the market expectation of 226.9 million. This is an increase of 15.9% compared to the first quarter of last year.

Monthly active users in the U.S. totaled 39.6 million, an increase of 6.4% from a year earlier. Overseas monthly active users also increased 18.1% to 189.4 million.

As Musk declared that it would convert to a private company after the acquisition of Twitter, this earnings announcement may be Twitter’s last earnings announcement as a publicly traded company, foreign media reported. On the same day, Twitter said, “Considering Elon Musk’s ongoing takeover of Twitter, we will not provide future guidance (performance forecast), and we will withdraw all of the previously presented (management) goals and forecasts.”

On the other hand, Musk secured about 73.5 million shares (9.2% stake) in Twitter on March 14th, but it was only announced on April 4th. Then, in the first disclosure, he stated that he was a ‘passive investor’ with no intention of getting involved in Twitter’s management, but did not submit documents to prove this and only stated ‘Not applicable’. However, when he was later selected as a Twitter director, he changed his name to an ‘active investor’ and showed inconsistent behavior.

In response, the Federal Trade Commission (FTC) is investigating whether Musk complied with the relevant regulations when he reported that he had acquired a stake in Twitter. The Information, a media outlet for American tech companies, said, “It is unlikely that the FTC, an antitrust enforcement agency, will reject Musk’s takeover of Twitter, but we are investigating a change from a passive investor to an active investor in just one day.”

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