ALBAWABA – American tech billionaire Elon Musk said Saturday that the social media platform he bought last October, Twitter, has lost roughly half of its advertising revenue, news agencies reported.
"We're still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load," the billionaire said in a post, responding to a user who was giving suggestions on financing for the platform.
Musk bought Twitter for $44 billion.
They "need to reach positive cash flow before we have the luxury of anything else," he added, without further elaboration.
Insider Intelligence has reported that Twitter was set to earn less than $3 billion in 2023, down one-third from 2022, according to Agence France-Presse (AFP).
After terminating thousands of employees and cutting cloud service bills, Musk had said the company reduced its non-debt expenditures to $1.5 billion from a projected $4.5 billion in 2023, Reuters reported.
The company also faces annual interest payments of about $1.5 billion. These payments are a result of the debt it took on in the $44 billion deal that turned the company private, as reported by Reuters.
It is unclear what time frame Musk was referring to by the 50 percent drop in ad revenue. But he has reaffirmed that Twitter was going to make $3 billion in revenue in 2023, down from $5.1 billion in 2021.
Musk’s changes have turned off users and advertisers alike, AFP said.
Earlier this month, Musk announced that Twitter was limiting verified accounts to reading 10,000 tweets a day, to curb excessive data mining. Whereas non-verified users – free accounts that make up the majority of users – are limited to reading 1,000 tweets per day.
Meanwhile, new unverified accounts would be limited to 500 tweets.
More recently, Twitter said Tweetdeck will only be available to verified users, starting August.
These changes came as Threads, an app launched by Facebook parent company Meta as a rival to Twitter, signed up more than 100 million users in its first five days.
Twitter is reported to have around 200 million regular users. But it has suffered repeated technical failures since Musk bought the platform and fired thousands of staff.
