Elon Musk is a twat. It's only fitting he's now the chief twit. I've never liked the guy. He has a face that is begging to be sucker punched, mainly because of his arrogant personality.
His cars are rolling piles of shit, but then again, most pure-EVs are rolling piles of shit. Has he finally figured out how to assemble body panels correctly? (His market share in Europe, where plug-in EVs are quite popular, has plummeted since 2019. The number of annual units sold there by Tesla has grown since 2019, but other automakers such as Mercedes-Benz and Volkswagen are selling far more EV units in Europe than Tesla these days.)
The recent financial challenges at Twitter are mostly an expense issue, not a revenue issue, contrary to what some here and elsewhere have written to fit their political narrative of choice.
The company under its prior leadership went on a spending spree and has also been adversely impacted by rising infrastructure costs (chip shortage related in large part, I'm sure). Downsizing staffing is a wise move given the current cost control challenges the company is facing and given the uncertain economic outlook that exists.
Here is the June 30, 2022 Form 10-Q:
https://d18rn0p25nwr6d.cloudfront.net/C ... 35e3bb.pdf
From page 42:
In the six months ended June 30, 2022, cost of revenue increased by $250.2 million compared to the six months ended June 30, 2021. The increase was attributable to a $115.6 million increase in infrastructure costs, a $74.4 million increase driven primarily by revenue share expenses and personnel-related costs due to an increase in employee headcount, and a $60.2 million increase in depreciation and amortization expense.
We plan to continue to scale the capacity and enhance the capability and reliability of our infrastructure to support mDAU growth and increased activity on our platform. We expect that cost of revenue will vary as a percentage of revenue over time.
Note: mDAU = monetizable daily active user. These are essentially users who are logged into their Twitter account (or another Twitter owned platform) who are able to view ads.
Also from page 42:
In the six months ended June 30, 2022, research and development expenses increased by $276.0 million compared to the six months ended June 30, 2021. The increase was driven by a $217.2 million increase in personnel-related costs mainly driven by an increase in employee headcount as we continued to invest in engineering, product, design, and research. Personnel-related costs included $13.1 million of severance-related costs incurred in the second quarter of 2022. The increases in research and development expenses were also driven by a $36.0 million increase in facilities costs and other administrative expenses, and a $22.8 million decrease in the capitalization of costs associated with developing software for internal use due to reprioritization efforts.
We are moderating our investments and striving to be even more focused on limiting our investments in engineering, product, design, and research. As we look to manage our cost structure, we will see a reduction in research and development expense growth in the near future. We expect that research and development expenses will vary as a percentage of revenue over time.
From page 43:
In the six months ended June 30, 2022, sales and marketing expenses increased by $71.6 million compared to the six months ended June 30, 2021. The increase was attributable to a $46.7 million increase in personnel-related costs, a $21.1 million net increase in facilities costs and other administrative expenses, and a $3.8 million increase in marketing and sales-related expenses. The increase in personnel-related costs was mainly driven by an increase in employee headcount, and it included $2.9 million of severance-related costs incurred in the second quarter of 2022.
We are moderating our investments and striving to be even more focused on limiting our investments in sales and marketing. As we look to manage our cost structure, we will see a reduction in sales and marketing expense growth in the near future. We expect that sales and marketing expenses will vary as a percentage of revenue over time.
Finally, from page 44:
In the six months ended June 30, 2022, general and administrative expenses increased by $107.4 million compared to the six months ended June 30, 2021. The increase was primarily attributable to a $67.1 million increase in personnel-related costs, mainly driven by an increase in employee headcount. Personnel-related costs included $2.8 million of severance-related costs incurred in the second quarter of 2022. The increase in general and administrative expenses was also driven by $33.1 million of transaction expenses associated with the proposed Merger incurred in the second quarter of 2022 and a $9.7 million increase in other professional service fees, offset by a $2.5 million net decrease in facilities costs and other administrative expenses.
We plan to continue to invest in general and administrative functions to ensure we have an appropriate level of support for our key objectives. We expect that general and administrative expenses will vary as a percentage of revenue over time. As we look to manage our cost structure, we will see a reduction in certain general and administrative expenses; however, in the near term, general and administrative expenses will likely increase in absolute terms due to costs related to the Merger and related litigation.
Clearly, the prior executive management team lacked proper expense control discipline. They knew the investor community was nervous (understandably so), which is why the above passages from the June 30, 2022 10Q filing gave some lip service toward promising spending cuts in certain areas moving forward.
The overtures Musk is making toward certain disaffected former Twitter users are being made because he understands the more people who use the Twitter ecosystem, the more revenue to be had.
It's a balancing act; you do not want to bring in a bunch of new users while chasing away the folks who are already there (which is why Musk is promising the formation of a content advisory council, and is also why he is not choosing to hastily restore any previously suspended accounts).
Morgan Wallen is a piece of garbage.