When Elon Musk bought Twitter for $44 billion last October, few thought the company it would be about to go bankrupt a few months later.
Musk alerted him in early 2023, but based on the facts of the company’s previous board of directors. However, The South African stepped on the accelerator with his decisions, scaring away investors.
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
On July 15, Musk wrote: “We still have negative cash flow, due to a roughly 50% drop in ad revenue plus a heavy debt load. We need to get cash flow positive before we can afford anything.”
In February, he acknowledged that the last few months had been “extremely difficult” but that the company “now tends to reach the equilibrium point”.
The Via Crucis of Elon Musk’s Twitter
The facts are as follows:
- Twitter had about 13 billion dollars in debt before the arrival of the tycoon.
- Musk laid off more than 6,000 workers, with the argument of the company’s debts. Currently, the campus has about 1,500 employees, but the lawsuits against Twitter reach 500 million dollars in compensation.
- Twitter’s daily revenue dropped 40% year-on-year in January, and the number increased remarkably with the passage of time.
- Despite the arrival of Linda Yaccarino as CEO, advertisers kept leaving the company, due to the changes introduced by Musk, including the return of accounts considered violent speech.
- Initiatives like Twitter Blue, for which a monthly payment was paid for the verification badge, did not catch on with the users.
- And now it’s added Threads, Meta’s social network that seeks to take away advertisers who left the blue bird’s nest.
Damion Schubert, Creative director of the Boss Fight studio, which works with Netflix, posted a thread on Twitter about the situation on the Elon Musk network. The conclusion he reached is that Twitter is broken, but that the South African has not wanted to announce it yet.
The last week on Twitter has been really an amazing string of WTF, even by the impressive standards of Elon. It’s really funny when you put all the pieces together.
It’s important to start at the beginning. Twitter’s pretty broke.
(amusing thread) pic.twitter.com/KSF2BwDOM8
— Damion Schubert – @ZenOfDesign.com on bsky (@ZenOfDesign) July 16, 2023
It’s a matter of time? Will Musk be able to find his way around and achieve the salvation of the little blue bird?