Twitter cash flow is negative after heavy debt, loss of ad revenue says Elon Musk

The former CEO has not been able to turn around the social media platform like he had envisioned.
Ameya Paleja
Elon Musk
Elon Musk


Cash flow at social media platform Twitter is currently negative, former CEO and owner Elon Musk wrote in a tweet on Saturday. Musk has attributed this to a 50 percent decline in advertisement revenue and a "heavy debt load".

Both the factors listed by Musk are the result of his actions. The legal team at Twitter dragged Musk to court after the world's richest person tried to wiggle out of the $44 billion offer he had made in April 2022.

Musk financed the deal by offloading some of his Tesla stock but also taking on the loan whose interest payments tally up to one billion dollars a year, Interesting Engineering has previously reported.

After taking up the CEO role, Musk reinstated accounts to were previously banned and loosened content moderation policies which saw advertisers desert the platform in large numbers. Twitter, whose advertisement revenues are a small fraction compared to Meta-owned Instagram, hasn't recovered from this debacle.

Musk still 'unlocking potential'

Musk's recent claim is in sharp contrast to one he made in an interview with the BBC. In April this year, Musk said that all advertisers had returned to the site and the platform was "roughly breakeven" and would be cash flow positive in the next three months.

In a Twitter interaction, Musk revealed that there had been a 50 percent drop in advertising revenue, and reaching "positive cash flow" was the top priority right now before doing anything else.

Besides firing thousands of employees at the company, Musk has launched a subscription-based service to improve the bottom line. However, none of these measures seemed to have worked exceedingly well so far, and Musk recently brought in a seasoned marketing professional, Linda Yaccarino, to head the social media platform.

Could a new CEO change Twitter's fortunes?

Even after stepping down from the CEO position, Musk has primarily been making significant announcements at Twitter, such as the recent reduction in the number of tweets users could view. Yaccarino has been working behind the scenes to improve users' Twitter experience.

Twitter cash flow is negative after heavy debt, loss of ad revenue says Elon Musk
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Recently, Twitter also began sharing some of its revenues with select content creators. The revenue-sharing, however, is limited to subscribers of Twitter Blue subscription.

Interestingly right-wing influencers were among those who shared information about getting paid from Twitter. However, famous names such as MrBeast and twins Brian and Ed Krassenstein were also among those who got born, CNBC reported.

Yaccarino has previously said that Twitter will focus on video and commerce partnerships and is working with politicians, entertainers, payment service providers, and publishers to create an ecosystem where creators can be paid for the content they generate.

Yaccarino's attempts to turn around the company's fortunes have now been further challenged by the launch of Meta's Threads, a rival app looking to mimic the good parts of Twitter. The service has signed up more than 150 million customers in the past week, leapfrogging the likes of Mastodon and Bluesky, powered mainly by the ability to use existing Instagram accounts to sign up.

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