Twitter misses earnings expectations, partially blames revenue drop on Elon Musk takeover bid

Musk would have been appointed to Twitter’s board on Saturday, but the world’s richest man informed the company on the day that he would not, in fact, be taking the board seat.

The company missed analyst estimates on earnings, revenue and user growth.

The company's shares fell as much as 2% before the market opened.

Key numbers are listed here.

• Earnings per share: A loss of 8 cents, adjusted, vs expected earnings of 14 cents, according to a Refinitiv survey of analysts
• Revenue: $1.18 billion vs $1.32 billion
• Monetizable Daily Active Users (mDAUs): 237.8 million vs 238.08 million expected, according to Refinitiv

Revenue fell 1% year-over-year. Wall Street had expected more than a billion dollars. According to Refinitiv, it was the biggest revenue miss in the company's history.

The company partially blamed the revenue drop on ad industry headwinds tied to the broader challenging macroeconomic environment, as well as uncertainty related to the pending acquisition ofTwitter by an affiliate of Musk.

With a heavy reliance on advertising, social media companies have felt the weight of macroeconomic challenges, as fears around inflation, interest rate concerns, continued supply chain issues and the war inUkraine led some advertisers and brands to adjust their ad spend On Thursday, after it reported disappointing second-quarter results and said it plans to slow hiring, its shares plummeted 25% in extended trading.

The pending acquisition by Musk made it impossible for the company to give guidance for the third quarter. It is not going to host a conference call with analysts to discuss the results.

During the quarter, costs and expenses ballooned by a third. The company swung to a loss of 8 cents per share and reported its first adjusted loss in two years.

The cost of the Musk acquisition was $33 million in the second quarter. In the second quarter, Severance-related costs were almost $20 million. The Wall Street Journal reported that a third of the talent acquisition team was laid off.

The proposed acquisition of the company by Musk is at the center of a legal fight. The CEO attempted to back out of the deal. According to Musk, the number of fake accounts was not reported and the number of fraudulent accounts was not reported. The billionaire refused to honor his obligations to the company because the deal he signed no longer served his interests, according to the lawsuit.

On Tuesday, the Delaware Court of Chancery Chancellor ruled in favor of an expedited five-day trial for the social media company.

Robert Hum worked for CNBC.

The most likely outcome is that he needs to pay a break up fee.