In a recent development, billionaire entrepreneur Elon Musk has publicly acknowledged the challenges faced by Twitter since his acquisition of the social media platform. Musk revealed that Twitter has experienced a considerable decline in ad revenue and continues to grapple with negative cash flow.
Musk’s admission came as a response to a Twitter user named Sophie, who suggested that Musk gather a consortium aligned with his vision for the platform. Sophie proposed a strategy involving debt acquisition and a tender/exchange offer for convertible notes with more favorable terms.
Relevant Read: Twitter Restricts Access to TweetDeck to Verified Users
Addressing Sophie’s tweet, Musk acknowledged the financial strain faced by Twitter, stating, “We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load.” Musk emphasized that achieving positive cash flow is a top priority for Twitter before pursuing other initiatives.
In an effort to address user complaints, Musk, the owner of Twitter, also announced an increase in the daily tweet limit by 50% for verified Twitter accounts. This move aims to provide more flexibility and engagement opportunities for users.
Following Musk’s acquisition of Twitter, several major advertisers temporarily halted their spending on the platform due to concerns about potential changes under the billionaire’s leadership. However, earlier this year, Musk revealed that many of these advertisers had returned, expressing confidence in Twitter’s progress towards achieving positive cash flow.
Market research firm Sensor Tower estimates that advertiser spending on Twitter decreased by 89% to $7.6 million over a two-month period earlier this year. Prior to Musk’s takeover, the top 10 advertisers had invested $71 million in ads between September and October 2022.
The Twitter community will be closely watching as Musk navigates the challenges, works towards stabilizing the platform’s financials, and implements strategies to regain ad revenue and positive cash flow.