Elon Musk says Twitter cash flow remains negative with ‘heavy debt’
SpaceX, Twitter and electric car maker Tesla CEO Elon Musk looks on as he speaks during his visit to the Vivatech technology startups and innovation fair at the Porte de Versailles exhibition center in Paris, June 1[ads1]6, 2023. (Photo by Alain JOCARD / AFP ) (Photo by ALAIN JOCARD/AFP via Getty Images)
Alain Jocard | Afp | Getty Images
Tesla and SpaceX CEO Elon Musk, who is also CTO and executive chairman of Twitter, said early Saturday morning that cash flow remains negative at the social media company due to a nearly 50% drop in advertising revenue combined with “heavy debt.”
“Need to reach positive cash flow before we have the luxury of anything else,” Musk wrote in response to a tweet.
Musk acquired Twitter last October in a deal worth about $44 billion, including about $13 billion in debt. He sold his Tesla stock for billions of dollars in part to finance that deal.
By January, hundreds of advertisers had reduced or halted their ad spending on Twitter in response to Musk making deep cuts at the company, implementing changes to the platform, notably restoring previously banned accounts and changing its approach to content moderation.
In April, Musk told a BBC reporter that “almost all” advertisers had resumed buying ads on Twitter. He also claimed at the time that the company was “about breakeven”, and expected to be cash flow positive within the next quarter.
His statement about Twitter’s cash flow problems today comes just over a month since Linda Yaccarino, who previously ran global advertising for Comcast’s NBCUniversal, took on the role of Twitter chief. NBCUniversal is the parent company of CNBC.
Yaccarino’s appointment inspired hopes among media industry insiders that Twitter would address immediate challenges to its ad business.
In recent days, Twitter began handing out a portion of its ad revenue to select content creators on the platform. Musk’s comments were made in response to followers wanting to know why this revenue sharing program was so limited in scope.
A number of widely followed accounts on Twitter posted that they were dismayed that they were not yet eligible to earn money from the program. As The Verge previously reported, the revenue-sharing program was only available to users who paid for a Twitter Blue-verified subscription, and the amounts paid were “driven by ads placed in replies to tweets.”
Influencer Andrew Tate – who espouses misogynistic views online and is facing trial on charges of rape, human trafficking and forming a criminal gang to sexually exploit women in Romania – revealed that Twitter paid him more than $20,000. Tate has sued the accusers who made those allegations.
Several right-wing influencers also posted about receiving Twitter payments, along with fans and promoters of Tesla stock and products, including Omar Qazi (who uses the handle “@WholeMarsBlog” on Twitter) and Sawyer Merritt, who each posted about netting more than $5000.
Common influencers who shared details of their Twitter earnings included Brian and Ed Krassenstein, Mr. Beast and the account @interneth0f (which stands for Internet Hall of Fame). The Internet Hall of Fame posts screenshots of other people’s popular social media posts and recycles them.
It’s not clear how much Twitter paid creators in total in this first round of payments. Twitter sent an automated reply with a crude symbol in response to CNBC’s request for comment on Saturday. Twitter’s parent company, X Corp., is facing numerous lawsuits from former employees and suppliers over non-payment of bills and severance pay.
