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Twitter's cash flow still negative due to 50% drop in ad revenues, heavy debt: Elon Musk  

Twitter's cash flow still negative due to 50% drop in ad revenues, heavy debt: Elon Musk  

Elon Musk was replying to a Twitter user’s suggestions regarding recapitalisation.  

The Twitter owner did not, however, specify the time frame when Twitter logged a 50 per cent drop in ad revenue. The Twitter owner did not, however, specify the time frame when Twitter logged a 50 per cent drop in ad revenue.
SUMMARY
  • Twitter's cash flow continues to remain negative due to around 50 per cent drop in its advertising revenues and heavy debt load, the company's owner and CTO and the world's richest person Elon Musk said on Sunday
  • He also said that Twitter needs to reach positive cash flow before anything else. Musk was replying to a Twitter user's suggestions regarding recapitalisation
  • The Twitter owner did not, however, specify the time frame when Twitter logged a 50 per cent drop in ad revenue

Twitter's cash flow continues to remain negative due to around 50 per cent drop in its advertising revenues and heavy debt load, the company's owner and CTO and the world's richest person Elon Musk said on Sunday. He also said that Twitter needs to reach positive cash flow before anything else. Musk was replying to a Twitter user's suggestions regarding recapitalisation.  

"We’re still negative cash flow, due to ~50 per cent drop in advertising revenue plus heavy debt load," Musk said. "Need to reach positive cash flow before we have the luxury of anything else."   

The Twitter owner did not, however, specify the time frame when Twitter logged a 50 per cent drop in ad revenue. Musk earlier said Twitter was on track to report around $3 billion in revenue in 2023, compared to $5.1 billion in 2021.  

Musk’s latest tweet implies that cost-cutting measures since Musk acquired Twitter in October last year are not enough to get Twitter to cash flow positive. After the mass layoffs at Twitter, he said the company reduced its non-debt expenditures to $1.5 billion from a projected $4.5 billion in 2023.  

It also suggests Twitter’s ad revenue may not have come back on track as fast as Musk would have liked. In the recent past, Twitter has been criticised for lax content moderation, Reuters reported.  

Twitter has also witnessed an exodus of many advertisers as they did not their ads to appear next to inappropriate content. Musk said in a BBC interview in April that most advertisers returned to the site.  

He also hired Linda Yaccarino, former ad chief at Comcast’s NBCUniversal, as the CEO of Twitter to improve ad sales and subscription revenue. Yaccarino started working with Twitter in June this year and told investors to focus on video, creator, and commerce partnerships.  

She is also in talks with prominent figures associated with politics, entertainment, and payments services, as well as news and media publishers. Twitter said on Thursday that select content creators will be eligible to get part of the ad revenue the company earns in an attempt to draw more content creators to Twitter.  

(With inputs from Reuters)

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Published on: Jul 16, 2023, 1:03 PM IST
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