Elon Musk Reveals Twitter’s Negative Cash Flow Due to Advertising Slump and Heavy Debt

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Elon Musk, the CEO of Tesla and SpaceX, as well as the CTO and executive chairman of Twitter, recently expressed concerns about the negative cash flow at Twitter. In a tweet on Saturday morning, Musk attributed this situation to a significant drop in advertising revenue and the burden of heavy debt.

Musk took control of Twitter in October last year through a deal worth approximately $44 billion, which included $13 billion in debt. To finance this acquisition, he sold billions of dollars’ worth of Tesla shares. However, by January, many advertisers had reduced or completely stopped their ad spending on Twitter due to staff cuts and changes implemented by Musk. These changes included restoring previously banned accounts and altering the approach to content moderation.

In April, Musk stated that almost all advertisers had resumed buying ads on Twitter. He also mentioned that the company was close to breaking even financially and expected to achieve positive cash flow within the next quarter. However, his recent statement indicates ongoing challenges with cash flow.

This revelation comes just over a month since Linda Yaccarino assumed the role of Twitter CEO. Yaccarino’s appointment raised hopes among media industry insiders that she would address immediate challenges faced by the company’s ad business.

In an effort to generate more revenue, Twitter recently introduced a revenue-sharing program for select content creators on its platform. Musk’s comments were prompted by followers who questioned why this program had limited availability. The program was initially restricted to users with paid subscriptions for Twitter Blue verification, with income earned driven by ads placed in replies to tweets.

Several widely followed accounts expressed disappointment at not qualifying for the revenue-sharing program yet. Notably, Andrew Tate—a controversial figure facing charges related to rape and human trafficking—claimed that Twitter paid him over $20,000 and has sued his accusers for making those charges public.

Furthermore, various right-wing influencers reported receiving payments from Twitter, along with fans and promoters of Tesla stock and products. Mainstream and other influencers, such as Brian and Ed Krassenstein, Mr. Beast, and the account @interneth0f (Internet Hall of Fame), also shared details about their Twitter income.

The exact total amount paid to creators in this initial round of payments remains unclear. It is worth noting that the parent company of Twitter, X Corp., is currently facing numerous lawsuits from former employees and vendors over non-payment of bills and severance.