Elon Musk: Twitter’s Cash Flow Still Negative
Musk’s Concerns About Twitter’s Cash Flow
American billionaire Elon Musk said on Saturday that Twitter’s cash flow was still negative due to a nearly 50% drop in ad revenue and a heavy debt burden, which fell short of his expectations lo last March that the platform could achieve a positive liquidity flow by June.
Musk stated in a tweet on Twitter: “We need to achieve positive cash flow before we can afford the luxury of anything else.”
Musk’s Twitter Announcement
We are still negative cash flow, due to ~ 50% drop in heavier advertising revenue debt load. Need to reach positive cash flow before having the luxury of anything else.
– Elon Musk (@elonmusk) July 15, 2023
Trouble with Cost-Cutting Measures
This is the latest sign that aggressive cost-cutting measures since Musk’s acquisition of Twitter last October haven’t been enough by themselves to shift cash flow in positive territory. They also suggest that Twitter’s ad revenue may not have recovered as quickly as Musk has said in a BBC interview in April, when he said most advertisers had returned to the site.
Efforts to Reduce Spending and Interest Payments
After laying off thousands of employees and slashing bills for cloud services, Musk said the company has cut its non-debt spending to $1.5 billion from a projected $4.5 billion in 2023. Twitter must also make annual interest payments of approximately $1.5 billion.
It’s unclear how long Musk pointed to the 50% drop in ad revenue.
Musk said Twitter is on track to generate $3 billion in revenue in 2023, down from $5.1 billion in 2021.
Twitter has been criticized for lax content oversight, resulting in the withdrawal of large numbers of advertisers out of fear that their ads would appear alongside inappropriate content.
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from Technology - AsumeTech https://asumetech.com/why-elon-musk-says-twitters-cash-flow-is-still-negative/
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