Twitter, under the leadership of CEO Elon Musk, is struggling with negative cash flow due to an approximately 50% drop in advertising revenue and a heavy debt burden. Musk revealed these financial difficulties in a recent tweet. This came in the same week when Twitter's ad-revenue sharing program began paying some creators, including far-right influencers.
Musk remains hopeful, claiming that the social media platform could experience "all-time high device user seconds usage" in the coming week. He also mentioned that most of the advertisers who left Twitter following his takeover in October have returned or plan to return.
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
However, according to research firm Sensor Tower, advertising spending on Twitter fell by 89% to $7.6 million during a two-month period earlier this year. Additionally, Twitter owes annual interest payments of about $1.5 billion due to the debt incurred when Musk privatized the company for $44 billion. This situation is a clear indication that Musk's cost-cutting measures over the past year have not managed to stabilize the company's finances.
The company's newly appointed CEO, Linda Yaccarino, is faced with the challenging task of rebuilding Twitter's advertising base amidst these ongoing financial difficulties.
