Business at the short message service Twitter is worse than expected. Company owner Elon Musk wrote on Twitter on Saturday that cash flow remained negative due to a nearly 50 percent drop in advertising revenue and a high debt burden. In March, Musk said it expected Twitter to achieve positive cash flow by June.
Musk’s news is the latest sign that the aggressive cost-cutting the billionaire has embarked on since acquiring Twitter in the fall of 2022 isn’t enough to push earnings to desired levels. In addition, advertising revenue does not seem to have recovered as quickly as Musk depicted in April.
In an interview with the BBC at the time, he said most advertisers had returned to the site. Twitter had been accused of not moderating enough content on its site. As a result, many advertisers turned away because they didn’t want their ads to appear alongside inappropriate content. Musk wrote on Saturday that Twitter needed to achieve positive cash flow “before we can afford anything else.” He was responding to a tweet about proposals to recapitalize the company. It was initially unclear to what period Musk was referring to his statement about a 50 percent drop in advertising revenue.
He has previously said Twitter is on track to hit $3 billion in revenue by 2023, up from $5.1 billion in 2021.
Musk took over Twitter in October 2022 for around 44 billion dollars, after he had already called off the project because of allegedly fake user accounts – although Twitter fought back in court. Musk then took over as CEO himself, taking the company public and laying off thousands of employees, much of the workforce. The billionaire Musk is also the boss of the electric car supplier Tesla and several other companies.