Musk says Twitter losing cash amid advertising revenue drop of nearly 50%
Owner and CEO says social network company, which he bought for $44 billion, is carrying heavy debt; Musk took over Twitter in the fall
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Elon Musk says Twitter is still losing cash because advertising has dropped by half.
In a reply to a tweet offering business advice, Musk tweeted Saturday, “We’re still negative cash flow, due to (about a) 50% drop in advertising revenue plus heavy debt load.”
“Need to reach positive cash flow before we have the luxury of anything else,” he concluded.
Ever since he took over Twitter in a $44 billion deal last fall, Musk has tried to reassure advertisers who were concerned about the ouster of top executives, widespread layoffs and a hands-off approach to content moderation. Some high-profile users who had been banned for things like hate speech, antisemitism, and extremism were allowed back on the site.
In April, Musk said most of the advertisers who left had returned and that the company might become cash-flow positive in the second quarter. In May, he hired a new CEO, Linda Yaccarino, an NBCUniversal executive with deep ties to the advertising industry.
But since then, Twitter has rolled out a series of deeply unpopular changes, including a requirement for users to be verified to use the online dashboard TweetDeck. The policy will take effect next month and appears to be aimed at raising extra revenue because users need to pay have their accounts verified under Musk’s changes.
TweetDeck is popular with companies and news organizations, allowing users to manage multiple Twitter accounts.
It comes after outcry over Musk’s announcement this weekend that Twitter has limited the number of tweets users can view each day — restrictions that the billionaire Tesla CEO described as an attempt to stop unauthorized scraping of potentially valuable data.
Insider Intelligence reported in May that Twitter was on course to earn less than $3 billion in advertising in 2023, almost a third less than in 2022.
Twitter got a new competitor this month when Facebook owner Meta launched a text-focused app, Threads, and gained tens of millions of sign-ups in a few days. Twitter responded by threatening legal action.
In the first two full days that Threads was broadly available — Thursday and Friday of last week — traffic on Twitter was down 5% compared with the same period a week prior, and down 11% compared with the same period a year ago, according to the web analytics company SimilarWeb.
But it also said Twitter traffic has experienced an overall decline even in the absence of Threads.
Twitter is thought to have around 200 million regular users but it has suffered repeated technical failures since Musk bought the platform and sacked thousands of staff.
Musk has threatened to sue Meta for stealing trade secrets and intellectual property, claims denied by the company.
The Times of Israel Community.