Elon Musk says Twitter cash flow remains negative with ‘heavy debt’

Tesla SpaceX CEO Elon Musk, who is also chief technology officer and CEO 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 along with “ Heavy debt.

“We need to get to cash flow positive before we can have the luxury of anything else,” Musk wrote in response to the tweet.

Musk acquired Twitter in October last year in a deal worth about $44 billion, including about $13 billion in debt. He sold billions of dollars’ worth of his Tesla stock in part to fund that deal.

By January, hundreds of advertisers had cut or halted their ad spending on Twitter in response to Musk making deep staff cuts at the company, implementing changes to the platform, particularly restoring previously banned accounts and changing its approach to content moderation.

In April, Musk told the BBC that “almost all advertisers” had resumed buying ads on Twitter. He also claimed at the time that the company was “nearly breaking even,” and expected cash flow to turn positive over the next quarter.

His statement about Twitter’s cash flow woes today comes just over a month since Linda Iaccarino, who previously ran global ads for Comcast NBCUniversal took on the role of CEO of Twitter. NBCUniversal is the parent company of CNBC.

Yaccarino’s appointment inspired hope among media industry insiders that Twitter would tackle the immediate challenges facing its advertising business.

In recent days, Twitter has started allocating a share of advertising revenue to select content creators on its platform. Musk’s remarks were in response to followers who wanted to know why this revenue-sharing program had limited scope.

A number of widely followed accounts posted on Twitter that they were upset that they were not eligible to earn income from the program yet. As The Verge reported earlier, it was a revenue sharing program Available only For users who paid for a verified Twitter Blue subscription, the payments were “paid by ads placed in replies to tweets”.

Influencer Andrew Tate – Who embraces misogynistic views online, and is facing trial for rape, human trafficking and forming a criminal ring to sexually exploit women in Romania — a Twitter post that paid him more than $20,000. Tate sued the defendants who made the accusations.

Several right-wing influencers have 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 making more than $5,000. .

Among the major influencers who have shared details about their income on Twitter are Brian, Ed Krassenstein, and Mr. Beast and the account @interneth0f (which stands for Internet Hall of Fame). The Internet Hall of Fame posts and reposts screenshots of other people’s popular posts from social media.

It’s not clear the total amount Twitter paid creators in this first round of payments. Twitter sent an automated response with raw code in response to CNBC’s request for comment on Saturday. Twitter’s parent company, X Corp. , countless lawsuits from former employees and vendors for non-payment of invoices and terminations.