Since Elon Musk acquired Twitter last October for $44 billion (£33 point 6 billion), it has lost nearly half of its advertising revenue, according to the company’s owner.
Despite adding that July was “a bit more promising,” he stated that the company had not experienced the increase in sales that had been anticipated in June.
In an effort to reduce costs, Mr. Musk laid off about half of Twitter’s 7,500 employees when he took over in 2022.
Some estimates place the user base of Threads, a rival app, at 150 million.
The Meta-designed platform has automatic access to a potential two billion users due to its built-in connection to Instagram.
Twitter is currently having trouble paying off its substantial debt. Although the billionaire did not give a time frame for the 50% decline in ad revenue, Mr. Musk stated at the weekend that cash flow remained negative.
He wrote in a tweet: “Need to reach positive cash flow before we have the luxury of anything else”.
According to Lucy Coutts, investment director at JM Finn, she thought Mr Musk would be able to turn Twitter around “but it is just going to take longer”.
“But unfortunately he has got $13bn of debt to pay by the end of July so we may see more pressure on the shares in Tesla if he has to sell more of his stake in that company.”
Mr. Musk claimed that Twitter was on track to generate $3bn (£2.29bn) in revenue in 2023, down from $5.1bn in 2021, after firing thousands of employees and reducing cloud service costs.
This latest development is yet another indication that aggressive cost-cutting measures have not been sufficient to encourage advertisers who left after the company’s content moderation rules changed to return.
That is despite an interview Mr. Musk gave in April, that the majority of users had returned to the site.
Meghana Dhar, the former head of partnerships at Snap and Meta, the company that owns the new Twitter rival Threads, claimed that the company was having financial difficulties before Elon Musk bought it.
“Elon and Twitter are in a candidly tough position right now. To be fair to Elon though, we’ve seen that decline in Twitter revenue and growth in revenue since pre-Elon – there’s been kind of a steady decline.”
Source-BBC
