Elon Musk says Twitter is still losing money due to 'heavy debt' and sliding advertising revenues
- Elon Musk said Twitter's still losing money, blaming "heavy debt" and lower advertising revenues.
- He's been trying to reinvent the platform after buying it for $44 billion last year.
Elon Musk said Twitter was still losing money, blaming a "heavy debt load" and sliding advertising revenue.
In a tweet replying to a user who suggested Musk get a consortium together to buy Twitter's debt, he bemoaned the company's uncomfortable financial position.
"We're still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load," Musk tweeted. "Need to reach positive cash flow before we have the luxury of anything else."
Musk's made sweeping changes to Twitter since paying $44 billion to buy it last October, including cutting about 90% of the workforce.
Still, Musk faces a steep uphill battle to make the firm profitable. The takeover was financed with huge amounts of borrowing and the interest payments alone are estimated to be about $1.5 billion a year, Reuters reported.
Fidelity, an asset manager, estimated in May that Twitter was now worth just $15 billion – even before Meta launched Threads, which Mark Zuckerberg hopes will be a Twitter killer.
Advertisers voted with their feet after Musk's takeover, with half of its biggest spending leaving in the following month.
While Musk told BBC News that advertisers had returned, an internal document shared with The New York Times in June showed that ad revenue had dropped by almost 60%.
That comes amid a wider downturn in online advertising, with many companies opting to spend less on marketing.
Meanwhile, measures Musk hoped would generate new streams of revenue have yet to take off. Twitter Blue made just $11 million in its first three months, for example.
Incentives to entice creators to the platform and get more sign ups to Twitter Blue by paying users based on impressions, also looks unlikely to generate real changes in revenue.