Elon Musk parted with $44 billion to purchase Twitter last year (Picture: Bloomberg/Getty)
Elon Musk has said his $44 billion purchase Twitter is losing cash because advertising has dropped by half.
In a reply to a tweet offering business advice, the billionaire tweeted on Saturday: ‘We’re still negative cash flow, due to (about a) 50% drop in advertising revenue plus heavy debt load.
‘Need to reach positive cash flow before we have the luxury of anything else.’
Responding to a post yesterday suggesting a Reuters story about the drop in advertising was false, he wrote: ‘This article is negative, of course, but we did not see the increase in advertising revenue that was expected in June.
‘July is a bit more promising.’
Ever since he took over Twitter in the £33.6 billion deal last autumn, Mr Musk has tried to reassure advertisers concerned about the ousting of top executives, widespread lay-offs and a different approach to content moderation. In an interview with the BBC in April, he admitted around 6,500 staff had been made redundant.
Since October, some high-profile users who had been banned were allowed back on the site – including former president Donald Trump, who has yet to post since he was barred from the platform following the January 6 US Capitol attack in 2021.
Many users have also reported a rise in ‘hateful content’ on the platform since Mr Musk took over, something he has denied.
In April, Mr Musk said most of the advertisers who left had returned and the company might become cash flow positive in the second quarter.
In May, he hired new chief executive Linda Yaccarino, an NBC Universal executive with deep ties to the advertising industry.
But, since then, Twitter has upset some users by imposing new limits on how many tweets they can view in a day, while some users complained they were locked out of the site.
Mr Musk said the restrictions are needed to prevent unauthorised scraping of potentially valuable data.
On Thursday, the company launched its creator ads revenue sharing programme. Announcing the update in a tweet, the company said: ‘We’re expanding our creator monetisation offering to include ads revenue sharing for creators. This means that creators can get a share in ad revenue, starting in the replies to their posts. This is part of our effort to help people earn a living directly on Twitter.
‘We’re rolling out the program more broadly later this month and all eligible creators will be able to apply.’
Twitter got a new competitor earlier this month when Facebook owner Meta launched text-focused app Threads, which gained tens of millions of sign-ups in a few days.
Twitter responded by threatening legal action.
