Jakarta –
Elon Musk reveals the culprits of Twitter’s worrisome finances. Twitter was faced with a 50% drop in advertising revenue and huge debt.
The company’s current cash flow is negative. The richest man in the world confided in a tweet on Twitter.
“We still have negative cash flow, due to (approximately) 50% drop in advertising revenue plus heavy debt burden. Need to achieve cash flow positive before we have any other luxuries,” Musk said in a tweet quoted from ReutersSunday (16/7/2023) yesterday.
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After Elon Musk acquiring Twitter, the company came under heavy criticism for its content moderation measures, followed by an exodus of many companies who did not want their ads to appear alongside inappropriate content.
As a result, the number of advertisers on Twitter declined. Even so, in an interview in April Musk reported that most advertisers have returned, but Twitter’s ad revenue still needs time to return to what it was.
In addition, Twitter still has a myriad of other problems. The company faces US$1.5 billion in annual debt interest payments. This condition was also one of Twitter’s considerations in taking a US$ 44 billion deal from Elon Musk until the company officially became his.
Elon Musk has made a series of cost-cutting efforts since acquiring the company with the blue bird logo in October 2022. Unfortunately, these efforts have not been enough to return the company’s cash flow to positive.
Some of them, he had laid off thousands of employees and cut service bills cloud. Besides that, Elon Musk adding, the company also reduced its non-debt expenditure to US$ 1.5 billion, from the projected US$ 4.5 billion in 2023.
Additionally, Musk’s hiring of Linda Yaccarino, former head of advertising at NBC Universal as CEO, also hints that ad sales are a priority for Twitter. In fact, advertising sales currently serve to increase subscription revenue.
Linda Yaccarino started working on Twitter in early June. It has informed investors that Twitter plans to focus on video, content creator, and commerce partnerships. He is also in early talks with political and entertainment figures, payment services, and news and media publishers.
(eng/eng)
2023-07-17 00:00:50
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