Elon Musk, the CEO of SpaceX, Twitter, and electric car manufacturer Tesla, addressed the negative cash flow at Twitter in a tweet on Saturday. Musk attributed the financial struggle to a nearly 50% drop in advertising revenue and heavy debt. He expressed the need to achieve positive cash flow before pursuing any other objectives.
Musk took over Twitter in October of the previous year in a deal worth approximately $44 billion, which included $13 billion in debt. He sold a significant portion of his Tesla shares to fund the acquisition. By January, Twitter faced a crisis as numerous advertisers reduced or stopped their ad spending due to Musk’s staff cuts and changes to the platform, including reactivating previously banned accounts and adjusting content moderation policies.
In April, Musk stated that “almost all” advertisers had resumed buying ads on Twitter, and the company was on track to achieve breakeven status. However, his recent remarks highlight the ongoing cash flow challenges faced by the company. These comments come just over a month after Linda Yaccarino, former global advertising executive at Comcast’s NBCUniversal, assumed the role of Twitter CEO. Yaccarino’s appointment raised hopes within the media industry that Twitter would address immediate issues affecting its ad business.
Recently, Twitter introduced a revenue-sharing program for select content creators on its platform. Musk responded to followers’ queries regarding the limited scope of this program. While several widely followed accounts expressed disappointment for not qualifying for the program, it was revealed that the revenue-sharing initiative was exclusive to Twitter Blue verified subscribers and involved ad revenue generated from replies to tweets.
Various influencers, including Andrew Tate, known for promoting misogynistic viewpoints online and currently facing legal charges, claimed to have received substantial payments from Twitter. In addition, right-wing influencers, Tesla enthusiasts, and mainstream influencers, such as Brian and Ed Krassenstein and Mr. Beast, revealed their earnings from the platform.
The exact amount paid to creators in this initial round of payments remains undisclosed. When contacted for comment, Twitter responded with a cryptic symbol. The parent company of Twitter, X Corp., is currently facing lawsuits regarding non-payment of bills and severance from former employees and vendors.
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