Musk: Twitter Still Cash Negative as Ad Revenues Plunge 50%

Twitter’s owner says the platform has yet to see a positive cash flow.

In a Twitter conversation Saturday (July 15), Elon Musk said the company has seen an almost 50% drop in ad revenue that — coupled with its debt load — has left it cash flow negative.

“Need to reach positive cash flow before we have the luxury of anything else,” Musk said in a tweet replying to another user.

After Reuters reported Saturday about Musk’s comment, he offered this reply on Sunday (July 16): “This article is negative, of course, but we did not see the increase in advertising revenue that was expected in June. July is a bit more promising.”

Musk’s comments follow a week in which Threads — the Meta-owned social media platform designed as a rival to Twitter — began to see a drop-off in engagement.

Also this week, Musk rolled out his artificial intelligence (AI) startup xAI, though the launch was held back by around 10 minutes due to technical difficulties.  

“Prophetic? Only time will tell,” PYMNTS wrote. 

“But the eccentric billionaire didn’t take long before digging into the goals behind his latest venture, which he launched to allegedly understand reality.”

“An AI powered by 10,000 GPUs can still not write a better novel than a human using just 10 watts of brain power — that’s a six order of magnitude difference, where two orders of magnitude can be accounted for by the difference between a synapse and a transformer, but what are the other 4?” Musk said during the launch.

Last month also saw reports that Twitter’s ad revenue had fallen 59% between April 1 and the first week of May.

A report by The New York Times, citing an internal presentation, said Twitter had routinely missed its weekly U.S. sales projections, in some cases by up to 30%. 

The same report quoted current and former employees who say Twitter’s ad department that businesses might be scared off by a rise in hate speech and pornography on the platform, as well as a rise in ads for online gambling and marijuana companies.

Another internal document says that Twitter’s American ad revenue — which had in the past made up 90% of the company’s income — for June would be down at least 56% each week compared to the same month in 2022.