Elon Musk has revealed that Twitter’s cash flow is still negative, according to Reuters.
In response to a suggestion on how to capitalize Twitter, Musk revealed that Twitter has suffered a 50% drop in advertising revenue. Overall, Twitter was still cash negative.
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
Since Musk took ownership of Twitter, he has attempted several strategies to cut costs and raise revenues. He cut down on staffing dramatically, keeping only a core of developers on payroll. Musk also instituted a Twitter Blue program charging people to be verified.
Twitter has faced many technical difficulties, including a botched Spaces for Governor DeSantis’ presidential announcement. He also limited Tweets due to a technical ability. Twitter’s valuation has already been lowered.
Twitter is also under fire from Meta’s Threads competition. In a potential answer to this, Musk has instituted an ad-revenue sharing model for popular accounts, which will further complicate Twitter’s abilities to generate a positive cash flow.
