Twitter owner Elon Musk said the company still has negative cash flow due to heavy debt and a nearly 50% drop in advertising revenue.
The social media site “needs to get good cash flow before we have any other luxuries,” Musk said in a tweet. The billionaire announced late Saturday that the platform would increase the number of tweets verified accounts can see each day by 50% following user complaints.
We are still cash flow negative due to a ~50% decline in advertising revenue and heavy debt. Good cash flow needs to be reached before any other luxury can be afforded.
— Elon Musk (@elonmusk) July 15, 2023
Several top advertisers have paused spending on the platform since Musk took over the company last year due to concerns about changes the billionaire could make. Earlier this year, Musk said that many of the advertisers that fled had returned and that cash flow was imminent.
“Pretty much everyone is either coming back or saying they’re coming back,” Musk said in a Twitter post in April.
Advertiser spending fell 89% to $7.6 million in the two-month period earlier this year, according to market research firm Sensor Tower. The top 10 advertisers spent $71 million on ads between September and October 2022 ahead of Musk’s acquisition.
Meta Platforms Inc. ’s Mark Zuckerberg launched his own Twitter rival, Threads, this month, and it quickly hit 100 million users in the days after its launch. Some lawmakers have switched to an alternative platform, but are still committed to it.
Days before the launch of Threads, Twitter sparked backlash from users after the site imposed a temporary limit on the number of tweets accounts could see each day. The limit was initially set at 600 for unverified users and 6,000 for verified accounts, which was eventually raised to 1,000 and 10,000 respectively.
Musk did not specify, but the latest increase indicates that verified users can now see 15,000 posts.
We will increase the rate limit by 50% for verified users. It will take effect in a few hours.
— Elon Musk (@elonmusk) July 16, 2023
Musk acquired the social media company for $44 billion by the end of October 2022. Since then he has made several changes to the product and company structure, many of which have resulted in the company reducing inflation and debt.
Following the deal, the firm laid off thousands of employees. Among other changes, Musk introduced Twitter Blue, which allows users to verify their identity for $8 a month, and introduced ways for users to monetize their content.