Negative cash flow attributed to a 50% decrease in ad revenue, according to Musk

Elon Musk, the owner of Twitter, is facing a series of setbacks in his $44 billion investment. Mark Zuckerberg’s Meta is gaining momentum with its new rival platform, Threads, and attracting a large number of subscribers thanks to its integration with Instagram. To join Threads, new users must have an Instagram account, which boasts over 1 billion monthly active users. This seamless integration makes it quick and easy for Instagram users to create a Threads account.

Today, Musk shared more unfortunate news through a tweet, stating, “We’re still experiencing negative cash flow due to a ~50% drop in advertising revenue as well as a heavy debt load. We need to achieve positive cash flow before we can focus on anything else.” Negative cash flow indicates that more money is leaving the company than coming in. However, he also mentioned yesterday that “it looks like this platform may witness a record-breaking surge in device user seconds usage this week.”

Musk’s management of Twitter has left advertisers dissatisfied as he continuously monetized verification checkmarks and abruptly changed company policies. He even imposed restrictions on the number of tweets users could read in a day, only to lift those restrictions hours later. This kind of instability on Twitter has made advertisers hesitant. Musk previously claimed that advertisers were returning and that cash flow would soon improve, but that has not been the case thus far. At the time, Musk stated, “Almost all of them have either returned or expressed their intention to return.”

According to app research firm Sensor Tower, Twitter’s advertising revenue plummeted by 89% to $7.6 million during a two-month period earlier this year. This is a significant decline compared to the $71 million spent by the top ten Twitter advertisers on ads from September to October of the previous year, just before Musk acquired the platform.

 

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