Months after acquiring Twitter, billionaire Elon Musk has acknowledged the social media platform’s loss of ad revenue and negative cash flow.
Musk noted that Twitter’s substantial debt and a significant 50 percent decline in advertising revenue continue to affect its cash flow.
His entry came in response to a Twitter user named Sophie, who suggested that Musk assemble a consortium that reflects his vision for the website.
“… and ask them to buy the debt then tender/offer exchange for more favorable terms for convertible notes,” he added.
Responding to his tweet, the tycoon said: “We are still cash flow negative, with advertising revenue down ~50% and heavy debt load,” he wrote.
Musk added that Twitter needs to achieve positive cash flow as a priority before considering other initiatives.
We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.
— Elon Musk (@elonmusk) July 15, 2023
In response to user complaints, the Twitter owner also announced that the daily tweet limit for verified Twitter accounts would increase by 50 percent.
Following Musk’s acquisition of the Bird app, several major advertisers temporarily halted their spending on the platform due to concerns about potential changes the billionaire would initiate.
The head of SpaceX, however, revealed earlier this year that many of those advertisers have returned, expressing confidence in the nearing success of positive cash flow.
Estimates from market research firm Sensor Tower show that advertiser spending on Twitter fell 89 percent to $7.6 million in a two-month period earlier this year.
Before Musk took over, the top 10 advertisers spent $71 million on ads from September to October 2022.
