Twitter, according to Elon Musk, continues to spend more than it earns.
The billionaire entrepreneur announced via tweet early Saturday morning that the company is dealing with a prolonged negative cash flow crisis, owing in part to a roughly 50% reduction in advertising revenue and hefty debt. “We need to achieve positive cash flow before we can consider any other luxuries,” Musk explained.
This recognition occurred the same week that Twitter’s ad-revenue-sharing scheme began paying select artists, including a few far-right influencers. Musk also projected that the social media site would have “an all-time high in device user seconds usage” in the following week.
Furthermore, he stated that nearly all advertisers that left the platform following his takeover in October have “either returned” or “indicated their intent to return.”
Sensor Tower, a research organization, reported to Bloomberg an estimate suggesting an 89% decrease in advertising expenditure to $7.6 million over a two-month period earlier this year. Furthermore, according to Reuters, Twitter faces annual interest payments of around $1.5 billion as a result of debt accumulated when Musk privatized the firm for $44 billion.
These recent developments suggest that Musk’s vigorous cost-cutting initiatives over the last year have gone short of restoring the company’s financial stability. It also shows that Twitter’s recently hired CEO, Linda Yaccarino, would face considerable obstacles in her efforts to rebuild the company’s advertising base.