Elon Musk mentioned Saturday that Twitter’s money circulation stays adverse because the social media platform he purchased for $44 billion final yr has misplaced roughly half of its promoting income.
“We’re still negative cash flow due to a 50% drop in advertising revenue plus heavy debt load,” the billionaire mentioned in a publish, responding to a person who was giving recommendations on financing for the platform.
“Need to reach positive cash flow before we have the luxury of anything else,” Musk mentioned in a tweet replying to recommendations on recapitalization.
This is the most recent signal that the aggressive cost-cutting measures since Musk acquired Twitter in October alone aren’t sufficient to get the corporate to money circulation optimistic.
It suggests its advert income could haven’t recovered as quick as Musk urged in an interview in April with the BBC that the majority advertisers had returned to the positioning. Musk had mentioned the corporate would possibly turn into cash-flow optimistic within the second quarter.
After shedding hundreds of workers and reducing cloud service payments, Musk had mentioned the corporate lowered its non-debt expenditures to $1.5 billion from a projected $4.5 billion in 2023.
Twitter additionally faces annual curiosity funds of about $1.5 billion because of the debt it took on within the $44 billion deal that turned the corporate personal.
It is unclear what time-frame Musk was referring to by the 50% drop in advert income. He has mentioned Twitter was on monitor to publish $3 billion in income in 2023, down from $5.1 billion in 2021.
Insider Intelligence has reported that Twitter was set to earn lower than $3 billion in 2023, down one-third from 2022.
Twitter has been criticized over lax content material moderation, adopted by an exodus of many advertisers who didn’t need their adverts showing subsequent to inappropriate content material.
Musk’s hiring of Linda Yaccarino, former advert chief at Comcast’s NBCUniversal, as CEO, signaled that advert gross sales are a precedence for Twitter whilst it really works to extend subscription income.
Yaccarino began working at Twitter in early June and has advised traders Twitter plans to deal with video, creator and commerce partnerships and is in early talks with political and leisure figures, funds companies, and news and media publishers.
On Thursday, Twitter mentioned that choose content material creators can be eligible to get part of the advert income the corporate earns in an try to attract extra content material creators to the positioning.
Changes instituted by Musk since his takeover of Twitter have turned off customers and advertisers alike.
Earlier this month, Musk introduced that Twitter was limiting verified accounts to studying 10,000 tweets a day. Non-verified customers – the free accounts that make up nearly all of customers – are restricted to studying 1,000 tweets per day. New unverified accounts can be restricted to 500 tweets.
A number of days later, Twitter mentioned TweetDeck, a well-liked program that enables customers to observe a number of accounts directly, will probably be obtainable solely to “verified” customers from subsequent month.
The modifications got here as Threads, an app launched by Facebook guardian Meta as a rival to Twitter, signed up greater than 100 million customers in its first 5 days.
Twitter is assumed to have round 200 million common customers, but it surely has suffered repeated technical failures since Musk purchased the platform and sacked hundreds of workers.
Musk has threatened to sue Meta for stealing commerce secrets and techniques and mental property, claims denied by the corporate.
Source: www.dailysabah.com
