In line with Elon Musk, Twitter’s money move stays destructive attributable to “excessive ranges of debt.”

Elon Musk, CEO of SpaceX, Twitter and electric car maker Tesla looks on as he speaks during his visit to the Vivatech technology startups and innovation fair at the Porte de Versailles exhibition center in Paris June 16, 2023. (Photo by Alain JOCARD / AFP ) (Photo by ALAIN JOCARD/AFP via Getty Images)

Alain Jocard | Afp | Getty Images

Tesla SpaceX CEO Elon Musk, who is also Twitter’s CTO and chief executive officer, said early Saturday morning that the social media company’s cash flow remained negative due to a nearly 50% drop in ad revenue and “heavy debt.”

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

Musk acquired Twitter in October last year in a deal worth about $44 billion, including about $13 billion in debt. To fund this deal, he sold his billions of dollars worth of Tesla stock.

By January, hundreds of advertisers had reduced or halted their ad spend on Twitter altogether in response to Musk making drastic staff cuts at the company and making changes to the platform, most notably restoring previously suspended accounts and changing his approach to content moderation.

In April, Musk told a BBC reporter that “almost all” advertisers had started buying ads on Twitter again. He also claimed at the time that the company was “about breakeven” and expected to be cash flow positive in the next quarter.

His statement today on Twitter’s cash flow woes comes a little over a month after Linda Yaccarino, who was previously responsible for global advertising Comcast’s NBCUniversal took on the role of Twitter CEO. NBCUniversal is the parent company of CNBC.

Yaccarino’s appointment raised hopes among media industry insiders that Twitter would address the immediate challenges to its advertising business.

In recent days, Twitter has started to distribute a portion of its advertising revenue to select content creators on its platform. Musk’s comments were in response to supporters who wanted to know why this revenue-sharing program was so limited.

A number of widely followed accounts on Twitter said they were dismayed that they were not yet qualified to start earning income from the program. As The Verge previously reported, the revenue sharing program was only available to users who paid for a Twitter Blue verified subscription, and the amounts paid were “determined by ads in replies to tweets.”

Influencer Andrew Tate, who espouses misogynist views online and is on trial for rape, human trafficking and forming a criminal gang to sexually exploit women in Romania, revealed that Twitter paid him more than $20,000. Tate has sued the accusers who made these allegations.

Several right-wing influencers also posted about receiving Twitter payments, as well as fans and promoters of Tesla stock and products, including Omar Qazi (who uses the alias “@WholeMarsBlog” on Twitter) and Sawyer Merritt, each about receiving more posted as $5,000.

Mainstream and other influencers who shared details of their Twitter earnings included Brian and Ed Krassenstein, Mr. Beast, and the @interneth0f (which stands for Internet Hall of Fame) account. The Internet Hall of Fame posts and reposts screenshots of popular social media posts by others.

It’s not clear how much Twitter paid YouTubers in total in this first round of payments. Twitter sent an automated response with a crude icon on Saturday in response to CNBC’s request for comment. Twitter’s parent company, X Corp., faces countless lawsuits from former employees and suppliers for non-payment of bills and severance pay.

You might also like

Comments are closed.