Elon Musk, the Executive Chairman of Twitter, announced that cash flow remains negative at the social media company because of a nearly 50% drop in advertising revenue coupled with “heavy debt.”
“Need to reach positive cash flow before we have the luxury of anything else,” Musk wrote in response to a tweet.
In October 2022, the Tesla CEO took over Twitter in a deal valued at around $44 billion, including about $13 billion in debt.
In January this year, hundreds of advertisers had reduced or halted their ad spending on Twitter in response to Musk making steep staff cuts at the company, and implementing changes to the platform.
Musk told a BBC reporter that “almost all” advertisers had resumed buying ads on Twitter. He also said at that time that the tech firm was “roughly breakeven,” and expected to become cash flow positive within the next quarter.
Twitter got a new competitor earlier this month when Meta launched a text-focused app, Threads, and gained tens of millions of sign-ups in a few days. Twitter responded by threatening legal action.
