CEO of SpaceX, Twitter and electric car maker Tesla Elon Musk looks on as he speaks during his visit to the Vivatech startup and innovation fair at the Porte de Versailles exhibition center in Paris on June 16, 2023. (Photo by Alain JOCARD / AFP ) (Photo by ALAIN JOCARD/AFP via Getty Images)
Alain Jokar | Afp | Getty Images
Tesla and SpaceX CEO Elon Musk, who is also Twitter’s CTO and executive chairman, said early Saturday morning that cash flow remained negative at the social media company due to a nearly 50% drop in advertising revenue coupled with a “severe debt”.
“We need to be cash flow positive before we have the luxury of anything else,” Musk wrote in a tweet.
Musk acquired Twitter last October in a deal valued at about $44 billion, including about $13 billion in debt. He sold billions of dollars worth of Tesla stock in part to finance that deal.
By January, hundreds of advertisers had reduced or suspended their ad spending on Twitter in response to Musk making steep layoffs at the company and implementing changes to the platform, notably restoring previously banned accounts and changing its approach to content moderation.
In April, Musk told a BBC reporter that “almost all” advertisers had resumed buying ads on Twitter. He also claimed at the time that the company was “roughly break even” and expected to become cash flow positive next quarter.
His statement about Twitter’s cash flow problems today comes just over a month after Linda Iaccarino, who previously led global advertising for on Comcast NBCUniversal has taken on the role of CEO of Twitter. NBCUniversal is the parent company of CNBC.
Iaccarino’s appointment has inspired hope among media industry insiders that Twitter will address the immediate challenges facing its advertising business.
In recent days, Twitter has begun giving away a portion of its ad revenue to select content creators on its platform. Musk’s remarks were made in response to followers who wanted to know why the revenue-sharing program was so limited in scope.
A number of widely followed Twitter accounts posted that they were dismayed that they still did not qualify to earn money from the program. As The Verge previously reported, the revenue-sharing program was only available to users who paid for a verified Twitter Blue subscription, and the amounts paid were “driven by ads placed in tweet replies.”
Influencer Andrew Tate, who holds misogynistic views online and is facing trial on charges of rape, human trafficking and setting up a criminal ring to sexually exploit women in Romania, has announced that Twitter paid him more than $20,000. Tate is suing the accusers who made those allegations.
Several right-wing influencers also posted about receiving payments on Twitter, along with fans and promoters of Tesla stock and products, including Omar Kazi (who uses the handle “@WholeMarsBlog” on Twitter) and Sawyer Merritt, who each posted about netting more than $5000.
Mainstream influencers who have shared details of their earnings on Twitter include Brian and Ed Krasenstein, Mr. Beast, and the account @interneth0f (which stands for Internet Hall of Fame). The Internet Hall of Fame posts screenshots of other people’s popular social media posts and re-distributes them.
It’s unclear how much Twitter paid creators in total in this first round of payments. Twitter sent an automated response with a rude character in response to CNBC’s request for comment on Saturday. Twitter’s parent company, X Corp., has faced countless lawsuits from former employees and suppliers over non-payment of bills and benefits.