Elon Musk says Twitter revenue down by half since acquisition as company faces new competitor Threads from Facebook owner Meta
Twitter owner Elon Musk said the social media platform has lost about 50 percent of its ad revenues since he took over the company last October.
As a result of this and a “heavy debt load” the company is still in “negative cash flow”, Musk said in a tweet.
“Need to reach positive cash flow before we have the luxury of anything else,” Musk wrote.
In another post he wrote that the company had not seen an expected sales rise in June, but added that July looked a “bit more promising”.
Musk’s $44 billion (£33.6bn) buyout saddled Twitter with $13bn in debt that requires annual interest payments of about $1.5bn.
He fired more than half of Twitter’s 7,500 staff after the takeover and has aimed to reduce costs by stopping rent payments on property, including Twitter’s San Francisco headquarters, as well as stopping payments to contractors and other measures.
Adding to the company’s challenges is new competitor Threads, launched by Facebook parent Meta Platforms earlier this month, which already has about 150 million users, according to some estimates.
The new platform has a built-in connection to Instagram that gives it a potential user base of 2 billion.
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
Advertisers began fleeing Twitter after Musk acquired it largely in response to the return of previously banned users and changes to content moderation practices, which led them to fear their advertising would be displayed alongside inappropriate content.
Musk’s appointment of former NBCUniversal head of advertising Linda Yaccarino as Twitter chief executive in June was seen as a move to focus on the company’s advertising business.
Last Thursday Twitter said some content creators would be eligible to receive part of the ad revenue the company receives.