Elon Musk, who is the CEO of Tesla and SpaceX, and also the CTO and executive chairman of Twitter, said on Twitter early Saturday morning that Twitter’s cash flow is negative due to a nearly 50% drop in advertising revenue and “heavy debt”.
Musk stated that Twitter needs to reach positive cash flow before it can focus on anything else.
Musk took over Twitter in October 2022 in a deal valued at around $44 billion, including about $13 billion in debt. By January 2023, hundreds of advertisers had reduced or halted their ad spending on Twitter in response to Musk making steep staff cuts at the company and implementing changes to the platform, especially restoring previously banned accounts and changing its approach to content moderation.
In April 2023, Musk claimed that almost all advertisers had resumed buying ads on Twitter and that the company was “roughly breakeven” and expected to become cash flow positive within the next quarter. However, his recent statement about Twitter’s cash flow problems comes a little over one month since Linda Yaccarino took on the role of Twitter CEO.