According to Elon Musk, Twitter is still spending more money than it earns. The billionaire tweeted that the company continues to struggle with negative cash flow due to a 50% drop in advertising revenue and a large debt load. “We need to achieve positive cash flow before we can afford anything else,” Musk stated.
This admission came after Twitter began distributing advertising revenue to some creators, including several far-right activists. Musk also claimed that this week, the social network could reach a “record number of users per second.” Earlier, he also stated that nearly all advertisers who left the platform after his acquisition in October had “either returned” or “said they would return.”
According to research firm Sensor Tower, as reported by Bloomberg, advertising spending dropped by 89% in the first two months of this year, totaling $7.6 million. Reuters reported that Twitter’s annual interest payments amount to around $1.5 billion due to the debt the company took on when Musk acquired it for $44 billion. This situation is the latest sign that Musk’s aggressive cost-cutting measures last year were insufficient to establish a solid financial foundation for the company. It also signals that the newly appointed CEO, Linda Yaccarino, has a significant task ahead in restoring Twitter’s advertising base.