Large debts and falling advertising revenues take their toll
Twitter owner and SpaceX CEO Elon Musk said over the weekend that Twitter’s cash flow remains negative due to a nearly 50 percent drop in ad revenue coupled with heavy debt.
“We need to achieve positive cash flow before we can afford any more luxuries,” said the billionaire, who bought the social network last October for about $44 billion. To do this, he had to sell part of Tesla shares, causing them to collapse.
By January, hundreds of advertisers had reduced or eliminated their spending on Twitter ads entirely in response to Musk’s drastic layoffs and changes to the platform, especially the reinstatement of previously banned accounts and a change in approach to content moderation.
Elon Musk can’t afford “any other luxury” – things are frankly bad at his new company Twitter
In April, Musk said that nearly all advertisers had resumed buying ads on Twitter. He also claimed at the time that the company was “roughly break even” and expected cash flow to turn positive during the quarter.
About a month ago, Linda Iaccarino, who previously ran NBCUniversal, became the CEO of Twitter. Since then, she has been trying to rebuild relationships with advertisers, but Elon Musk puts spokes in the wheels and does not allow the new CEO of Twitter to “save him from himself.”
The other day it became known that Twitter has notified popular microblogging authors that they will start receiving payments in the very near future .
