Despite Elon Musk’s efforts to make the company profitable, Twitter continues to bleed cash since advertisers have yet to return.
Musk acknowledged the problems in a Friday tweet after someone suggested he recruit other investors to share the debt load he owes for acquiring Twitter. In response, Musk indicated Twitter remains a financial sinking ship since he acquired the company last year for $44 billion with the help of loans, for which he now has to pay interest.
“We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else,” he wrote.
The statement confirms earlier reports that Twitter’s US ad revenue plunged 59% between spring 2022 and spring 2023. It also shows the company is still struggling to attract advertisers after many left months ago as he implemented controversial changes to the social media platform. (In April, Musk said most advertisers had returned.)
In a separate tweet on Sunday, Musk added: “We did not see the increase in advertising revenue that was expected in June. July is a bit more promising.”
Many advertisers left Twitter after it pulled back on content moderation and sold access to Twitter verified accounts, allowing anyone to buy a blue checkmark. That’s prompted an influx of spam, bots, and hate speech on the platform.
To attract advertisers, Musk hired former NBCUniversal ad chief Linda Yaccarino to serve as Twitter CEO. In the meantime, it looks like Twitter has been forced to run low-quality ads; we've noticed an influx of ads promoting a hentai-themed game and marijuana products, for example.