Twitter owner Elon Musk announced that the social network’s cash flow remains negative due to a significant drop in advertising revenue and the company’s debt.
Since Musk bought Twitter, he has made several changes to maximize revenues and reduce company expenses. Although the tycoon said in April that the platform was “roughly breaking even” financially due to the return of many of its advertisers, things seem to have taken a turn for the worse.
The social network’s CEO told a Twitter user giving him a business tip about Twitter that the company has suffered a 50% drop in advertising revenue.
“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,” Musk wrote without explaining from what period the drop began to be recorded or any other details.
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
However, it is well known that after Musk took over Twitter, about a hundred advertisers decided to reduce or stop advertising on the social network due to the multiple changes which it decided to carry out, including massive staff cuts, changes in content moderation and restoring accounts that had been blocked during the previous administration.
Last month, Musk himself said that revenues were down for not meeting the “[political] line,” and the situation seems to have worsened with the launch of Threads, the new Meta app that managed to sign up more than 100 million users in its first few days.
