Elon Musk claims he saved Twitter from bankruptcy

The CEO of the social network said he believes the company has "an opportunity to be cash flow positive" during the next quarter.

Ilustración de Elon Musk liberando al pájaro en Twitter. — Cordon Press.

Published by

Rosana Rábago Sainz

8 de marzo, 2023

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This past Tuesday, Elon Musk claimed that he saved Twitter from bankruptcy. The CEO of the social network said he believes, in statements reported in The Wall Street Journal that the company has "an opportunity to be cash flow positive" during the next quarter. He did so during his remarks at the Morgan Stanley Technology, Media, and Telecommunications Conference in San Francisco. In the talk, he stated that advertising was not an issue that concerned the social network before his arrival. He has made it one of his priorities to change that:

I think the potential here for Twitter revenue is gigantic. And this is going to sound totally weird, but Twitter didn't factor in relevance in advertising until three months ago. In the future, Twitter will have very relevant and useful advertising. And because it’s useful, because it’s relevant, there’s going to be a massive increase in revenue, because now it’s useful. So I’m very optimistic about the future. It’s been a very difficult four months, but I’m optimistic about the future.

Musk also spoke about the importance of the advertising content that appeared on the platform. He said it has to be right so that both the social network and the advertiser are satisfied: "The most important thing is that the advertising is effective, that it is relevant, and that it moves the needle for a company." In addition, Deadline reported that he acknowledged companies such as Disney and Apple who continue to advertise on Twitter:

Disney is a major advertiser on Twitter, one of our biggest advertisers. Apple is one of our biggest advertisers. Disney, of course, does not want to have its ads next to things that are not appropriate for a family audience. But there are [other] products that are more R-rated. Advertisers can actually adjust [ads to] what content they are comfortable having. The same is true on TV. The advertising you’re seeing at 7 p.m. is not the same you’re seeing at midnight. It’s up to the advertiser where they want to put their content.

Twitter was at risk of going bankrupt four months ago

Musk also recalled what the company was like before he took over as CEO in October 2022 after billion. He claimed that if Twitter had continued without his help, the company would have gone bankrupt within four months.

However, he also acknowledged his mistakes. Musk said that, after buying the company, Twitter faced a "massive decline in advertising." However, the damage had already been done. According to WSJ, over the last year, the company's revenues have fallen by approximately 40%.

That was one of the reasons why he claimed that Twitter owed $1.5 billion in annual interest payments. Advertising and debt costs must be added to this. In total, Twitter would owe $3 billion, almost half the profit it would make: "In the absence of action, Twitter would have had six billion in cost and three billion in revenue," he said.