Twitter user growth rises amid Musk takeover

Twitter Inc reported stronger than expected user growth in what could be its last quarter as a public company after agreeing to a $44-billion buyout by billionaire Elon Musk.

But overall revenue and advertising sales fell short of analyst estimates, due to the ongoing war in Ukraine. Shares rose slightly in pre-market trading.

The results lay out Musk’s challenges in improving the social media platform’s business to match its influence on news and culture.

Twitter has long faced criticism for its sluggish pace of product launches. Musk has tweeted suggestions ranging from releasing a widely-demanded edit button to making the Twitter algorithm open-source.

When Musk closes the deal, he will be overseeing a company that has had long-standing struggles with internal dysfunction, indecision and lack of accountability, Reuters previously reported according to eight current and former Twitter employees.

Daily active users on Twitter rose to 229 million in the first quarter ended March 31, from 199 million a year earlier. The figure beat analyst expectations of 226.8 million daily active users.

Facebook-owner Meta Platforms also reported a return to user growth on Wednesday, which helped propel social media stocks higher.

Twitter said an internal error led to an overstatement of user numbers between 2019 to 2021.

Given the pending acquisition, Twitter said it would not provide any forward looking guidance and was withdrawing all previous goals and outlook. The company last year announced it aimed to double annual revenue and grow to 315 million users by 2023, as former CEO Jack Dorsey aimed to signal a reset on years of product stagnation.

Total revenue in the first quarter was $1.2 billion, compared with analysts’ average estimate of $1.23 billion, according to IBES data from Refinitiv.

The company earns the majority of its revenue from selling digital ads on the website and app. Twitter paused ads in Ukraine and Russia in February amid the ongoing invasion, which the Kremlin calls a “special military operation.”

Musk has said that Twitter should not serve advertising, which would allow the platform to have more control over its content policies. Advertisers generally prefer strong content moderation, to help prevent their brand from appearing next to unsuitable content. Its net income rose to $513.3 million, or 61 cents per share, from $68 million, 8 cents per share, a year earlier.

Meanwhile, oil prices dipped but were trading in and out of positive territory on Thursday as investors weighed up tightening Russian supplies and the prospect of dwindling fuel demand in China.

Brent crude futures were down 63 cents, or 0.6%, at $104.69 a barrel by 1129 GMT. US West Texas Intermediate crude lost 49 cents, or 0.5%, to $101.53.

Both contracts had gained 30 cents on Wednesday on concerns over tight global oil supplies and another drawdown in U.S. distillate and gasoline stocks. On Thursday the contracts traded in range of about $3 a barrel.

The U.S. Energy Information Administration said that crude stocks rose by only 692,000 barrels last week, short of expectations, but distillate inventories including diesel and jet fuel fell to their lowest since May 2008.

Russian oil production could fall by as much as 17% in 2022, according to an economy ministry document seen by Reuters, as the country contends with Western sanctions.

Despite this expected shortfall, the OPEC+ group of producers comprising the Organization of the Petroleum Exporting Countries and allies led by Russia is expected to agree another modest output increase in June when it meets on May 5, sources told Reuters.

Concern over slowing demand weighed on market sentiment, however.

“Fears of spluttering economic growth have sent the dollar to highs not seen since March 2020, equity markets are tepid at best, Chinese restrictions have not been erased from the back of investors’ minds and these have capped gains in crude oil,” said PVM Oil analyst Tamas Varga.

In China, Beijing closed some public spaces and stepped up COVID-19 checks at others on Thursday as most of the city’s 22 million residents embarked on more mass testing in an effort to avert a Shanghai-like lockdown. The most recent lockdown has disrupted factories and supply chains, raising fears over the country’s economic growth.

But Asia’s biggest oil refiner, Sinopec Corp, expects the country’s demand for refined oil products to recover in the second quarter as COVID-19 outbreaks are gradually brought under control.

A slowdown in global growth owing to higher commodity prices and an escalation in the Russia-Ukraine conflict could further exacerbate oil demand fears.

Agencies