Introduction

American billionaire Elon Musk said on Saturday that Twitter’s cash flow is still negative due to a nearly 50% decline in advertising revenue, as well as a heavy debt burden that fell short of his expectations last March that the platform might achieve positive cash flow by June.

Musk said in a tweet on Twitter: “We need to achieve positive cash flow before we can afford the luxury of anything else.”

Tweet from Elon Musk

Challenges in Achieving Positive Cash Flow

This is the latest sign that the aggressive cost-cutting measures since Musk’s acquisition of Twitter last October have not been enough to move cash flow into positive territory. They also suggest that Twitter ad revenue may not have recovered as quickly as Musk said in an interview with the BBC in April when he said most advertisers had returned to the site.

Musk said after laying off thousands of employees and cutting cloud bills, the company cut its non-debt spending to $1.5 billion from $4.5 billion expected in 2023. Twitter also has to pay about $1.5 billion in annual interest payments.

It’s unclear how long Musk has been pointing out that ad revenues will fall by 50%.

Musk said Twitter will generate $3 billion in revenue in 2023, up from $5.1 billion in 2021.

Twitter has been criticized for lax content control, followed by a large number of advertisers pulling out due to concerns that their ads will be displayed alongside inappropriate content.