Elon Musk recently stated on Twitter that Twitter’s expenditure surpasses its earnings. In a tweet shared early Saturday morning, the renowned billionaire entrepreneur disclosed that the company is currently facing an ongoing issue of negative cash flow. This situation is attributed to various factors, including a significant drop of approximately 50% in advertising revenue and a considerable amount of debt.
“We need to achieve positive cash flow before we can consider any other luxuries,” stated Musk.
In the same week, an acknowledgment was made regarding Twitter’s ad-revenue sharing program, which had recently started making payments to certain creators, including a few far-right influencers. Elon Musk, the CEO, also made a prediction on Friday, stating that the social media platform could experience a record-breaking surge in device user seconds usage in the upcoming week.
Furthermore, Musk mentioned that nearly all the advertisers who had left the platform after his takeover in October have either returned or expressed their intention to return.
According to research firm Sensor Tower, there was a substantial 89% decline in advertising expenditure to $7.6 million over a two-month period earlier this year. Additionally, Reuters reported that Twitter is burdened with annual interest payments of approximately $1.5 billion, a consequence of the debt incurred when Musk took the company private for $44 billion.
These recent developments indicate that Musk’s aggressive cost-cutting strategies in the past year have not succeeded in stabilizing the company’s financial situation. This further implies that the newly-appointed CEO, Linda Yaccarino, faces significant challenges in her efforts to restore Twitter’s advertising base.
