Entrepreneur Elon Musk, owner of Twitter, announced via a tweet that the company’s cash flow is still negativemainly due to a heavy debt and a significant one decrease in advertising revenue (about -50%), without specifying the reference period. Previously, Musk predicted cash flow would be turned positive by June of this year.
Twitter still in the red, Musk admits “-50% advertising”
After acquiring Twitter for $44 billion at the end of October, Musk has taken drastic measures to reduce the company’s costs. This included the dismissal of nearly three-quarters of staff and the emphasis on subscription service Twitter Blue. These measures were aimed at improving Twitter’s financial situation.
They weren’t enough. Many advertisers have stopped investing in the platform due to some decisions made by Musk. In particular, the admission of problematic content that was previously banned on Twitter and the unbanning of several American far-right personalities led to theremoval of many advertisers. Many of whom saw the “blue check issues” with users pretending to be publicly traded companies as the proverbial straw that broke Twitter’s camel’s back.
The recent hiring of Linda Yaccarino as CEO also comes as an attempt to limit dwindling advertising revenue and heavy debt continue to negatively impact the company’s cash flow. She is still a right-wing personality (she worked in the Trump administration), but less divisive for advertisers. The results, however, are not as expected.
They are TwitterMusk wrote, “We still have negative cash flow, due to about a 50% decline in ad revenue and a heavy debt load. The need to achieve positive cash flow before we splurge on anything else.”
However, he did not give details on how he intends to operate to achieve that result. His initiatives so far have not worked.