Twitter owner Elon Musk said the company still has a negative cash flow because of its heavy debt load and a roughly 50% drop in advertising revenue.
Musk tweeted, “need to reach positive cash flow before we have the luxury of anything else.”
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
After Musk bought the twitter last year, a number of major advertisers stopped spending on platform out of worry about any changes the billionaire might make. Musk claimed earlier this year that many of the advertisers have returned and that the company will surely make profit.
Musk said, “Almost all of them have either come back or said they’re coming back.”
However, According to projections from market research firm Sensor Tower, advertiser spending dropped 89% in first two months of this year nearly to $7.6 million. The top 10 advertisers had already spent $71 million on commercials between September and October of 2022 before Musk’s takeover.
Musk said in a tweet, “need to reach positive cash flow before we have the luxury of anything else.”
This month, Mark Zuckerberg of Meta Platforms Inc. launched Threads, a rival to Twitter that quickly surpassed 100 million users in a few days following its release. Although some lawmakers have switched to the alternative platform, they are still hesitant to commit to it.
A temporary cap on the number of tweets that accounts can view each day on Twitter caused a user backlash before Threads launched. The cap was eventually raised to 1,000 from 600 tweets for unverified users and from 6,000 to 10,000 for verified accounts.
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