Last Updated on July 17, 2023 by Larious
While the competition between Elon Musk’s Twitter and Mark Zuckerberg’s Threads continues to intensify, the Twitter owner revealed on Saturday that the platform is in negative cash flow due to a 50% decline in advertising revenue and a “heavy debt load.”
Elon Musk Claims Twitter’s Ad Revenue Is Down By 50%
“We’re still negative cash flow, due to (about a) 50 per cent drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else,” Musk replied in a tweet to business advice received from a follower.
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
Musk, who also serves as the CEO of Tesla and SpaceX, took over Twitter in a $44 billion deal late last October. Ever since he has taken over Twitter, he has made several changes to the product and company structure, which he claims to have reduced the company’s cash burn and debt burden.
Not just this, the company has also been amid controversies, be it the widespread layoffs or firing of top executives before the launch of the Twitter Blue subscription program, its different approach to content moderation, or allowing some banned high-profile users back on the site.
In April, Musk told the BBC that the platform is now “roughly breaking even” with most advertisers returning to the site. He also added that the platform might become cashflow positive by the end of June.
In contrast to the above, last month, while talking about the revenue generated by Twitter, Musk, in a Twitter Spaces livestream event hosted with Robert F. Kennedy, Jr., said, “It’s definitely been extremely difficult. Basically, our revenue is cut in half because we didn’t toe the line.” He added it’s been a “huge struggle for Twitter to break even.”
The shocking admission made on Saturday comes in the same week that Twitter announced Ads Revenue Sharing Program for creators in a move to encourage more creators to join the site. As per this program, select content creators would be eligible for the company’s ad-revenue sharing program, which will help them earn a portion of ad revenue from ads served in the replies to their posts.
While things have been challenging for Twitter financially, the microblogging platform has also been under increased pressure after its rival app, Meta’s Threads, surpassed 100 million downloads within a week of its launch.