Elon Musk has confirmed through a tweet that Twitter cash flow remains negative after a 50% drop in ad revenue and by “a heavy debt load”, despite their expectations. The tycoon, owner of the social network since October, expected revenue from ads to increase in June compared to subsequent months.
“Still in negative cash flow, due to ~50% drop in ad revenue plus heavy debt load,” Musk said in response to a user tweet. This, specifically, advised the executive to “form a consortium that understands the vision” for Twitter “and have them buy the debt and then make an offer to buy/exchange for convertible notes on more favorable terms”. Convertible notes are a kind of short-term loans that can later be converted into shares.
Elon Musk has gone on to say that Twitter needs to “get cash flow positive” before they can afford “anything else.” Musk, we reiterate, I expected June to be a month in which Twitter would see revenue growth, although in the end it has not been like that. “July is a little more promising,” said the tycoon in another tweet.
Twitter is trying to recover ad revenue with different measures
Advertising revenue, let’s remember, has fallen since Elon Musk acquired Twitter and became the owner of the company in October 2023. His intention to make the social network a place where freedom of expression prevails, and the wave of publications which incite hate since Musk owned the company, have made many advertisers decide to withdraw their investments in the social network. A few months ago, the tycoon confirmed in an interview with the BBC that many advertisers had returned to Twitter. These are statements that contradict the results that he himself has announced.
Musk, on the other hand, has been making different moves with the aim of boosting ad revenue. The most notable, the hiring of Linda Yaccarino as CEO of Twitter. Yaccarino was president of global advertising and partnerships at NBCUniversal, and her goal at the social network is to handle business operations.
In addition to trying to win back advertisers, Elon Musk has taken different steps to avoid compensating Twitter’s cash flow, such as lay off thousands of employees or include new payment features on Twitter. Among them, the possibility that anyone can receive verification for 8 euros per month.