Listen to the Podcast:
Elon Musk says that Twitter still spends more money than it brings in. Early on Saturday morning, the billionaire wrote that the company was having a hard time making money.
Because advertising revenue had dropped by about 50 percent and it had a lot of debt. Musk said, “We need to have a positive cash flow before we can do anything else.”
We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.
— Elon Musk (@elonmusk) July 15, 2023
The disclosure comes the same week that some producers, including a few far-right influencers, started receiving payments under Twitter’s ad-revenue sharing scheme. Musk asserted on Friday that this week might witness a “all-time high device user seconds usage” on the social network. Prior to his takeover in October, he also claimed that almost all of the advertisers who had left the site had “either come back” or “said they will come back.”
Advertising expenditures were estimated by research firm Sensor Tower to have decreased by 89 percent to $7.6 million over a two-month span earlier this year. According to Reuters, Twitter must pay around $1.5 billion in interest per year because of the debt it acquired when Musk bought the company for $44 billion. This is the most recent indication that the drastic cost-cutting initiatives Elon Musk implemented over the past year were insufficient to restore the company’s financial stability. It also signals that Linda Yaccarino, the organization’s recently recruited CEO, will have her hands full trying to rebuild Twitter’s advertising base.
