The advertising revenues of Twitter have decreased by 50 percent, according to owner Elon Musk. In a tweet on Saturday, Musk mentioned that the lower income and high debt have contributed to the negative cash flow of the company. Musk emphasized the importance of achieving positive cash flow before considering other luxuries. However, he did not disclose the current advertising revenue or provide a comparison.
Last year, Elon Musk acquired Twitter for approximately $44 billion, resulting in multiple rounds of layoffs that affected around 80 percent of the staff. In March 2022, Musk stated that these “radical changes” were necessary to prevent bankruptcy and rescue the company. He estimated the value of Twitter to be $20 billion at the time, but believed it could eventually reach $250 billion.
Following Musk’s announcement of less content regulation on Twitter, some advertisers left the platform in dissatisfaction. They were concerned about their ads being displayed alongside inappropriate content. Despite a discount campaign implemented to regain advertisers, it seems to have not been enough to attract sufficient customers.
Part of Twitter’s debt is likely due to loans taken out by the company to cover part of the acquisition price. In January of this year, it was reported that the loans amounted to $13 billion. Additionally, former Twitter employees recently filed a $500 million lawsuit against the company for damages.
Currently, Twitter is facing financial challenges and will need to find strategies to increase its advertising revenues and improve its cash flow.
