Elon Musk, the CEO of Tesla and SpaceX as well as Twitter’s CTO and executive chairman, stated early on Saturday morning that the social media company’s cash flow is still negative due to “heavy debt” and a roughly 50% decline in advertising revenue.
Musk replied to a tweet with, “Need to reach positive cash flow before we have the luxury of anything else.
In an October 2017 acquisition estimated at roughly $44 billion, including nearly $13 billion in debt, Musk acquired Twitter. He raised money for the transaction in part by selling shares of Tesla valued at billions of dollars.
After Musk drastically reduced the number of employees at the firm and made changes to the platform, including restoring previously banned accounts and altering its approach to content moderation, hundreds of advertisers lowered or stopped spending money on Twitter ads by the end of January.
According to Musk, “almost all” sponsors had started purchasing Twitter advertisements in April, he told a BBC reporter.
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Twitter’s Breakeven And Revenue Sharing Plans
At the time, he also asserted that the business was “roughly breakeven” and anticipated turning cash flow positive within the next quarter.
A little more than a month has passed since Linda Yaccarino, who formerly oversaw global advertising for Comcast’s NBCUniversal, assumed the position of CEO of Twitter, made his comments concerning the company’s cash flow issues. CNBC’s parent company is NBCUniversal.
Insiders in the media sector were encouraged by Yaccarino’s arrival and believed that Twitter would quickly fix its ad business’s problems.
Twitter recently started giving some of its platform’s content providers a cut of its ad revenue. Musk responded to followers who questioned why that revenue-sharing arrangement had such a narrow reach with his comments.
Many popular Twitter accounts remarked that they were disappointed because they were not yet eligible to receive cash from the scheme.
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Source: www.cnbc.com