Elon Musk announces that Twitter is receiving approximately 50 percent less advertising revenue. The company also has a large debt mountain and a negative cash flow. In April this year, Musk said the company was ‘almost breaking even’.
“We continue to have negative cash flow due to approximately a 50 percent decline in advertising revenue and a heavy debt burden,” Musk shares in a response to a user who offers suggestions for financing the platform. Musk goes on to say that positive cash flow is necessary “before we have the luxury of anything else.”
A few months ago it was Musk more positive about the financial condition of the platform. The Twitter owner said at the time that most advertisers had returned to the site and the company was “almost breaking even.” However, The New York Times reported in June that Twitter’s advertising revenue in America had fallen by up to 59 percent compared to the previous year.
The company also has less left over from the reduced advertising revenue. Earlier this week, Twitter started sharing its advertising revenue with Blue subscribers. This only concerns advertising impressions from other Blue users. According to Musk, this is to prevent cheating through bots. Some Twitter users claim that they have already received several tens of thousands of dollars. In total, the company would transfer five million dollars to various accounts.
Since Musk’s takeover in October 2022, the value of Twitter more than halved. In the meantime, the platform is facing increasing competition. For example, Facebook parent company Meta recently introduced its microblogging service Threads and a large number of Twitter users have now switched to alternatives such as Bluesky and Mastodon.