Since Elon Musk paid $44 billion (£33.6 billion) to acquire Twitter in October of last year, Twitter has seen a nearly 50% decline in advertising revenue, according to the company’s owner.
Although he noted that July was “a bit more promising,” he stated that the business had not experienced the increase in sales that had been anticipated in June.
When Mr. Musk took over in 2022, he fired almost half of Twitter’s 7,500 employees in an effort to reduce costs.
According to some estimates, Threads, a rival program, has 150 million users right now.
A potential two billion people are instantaneously accessible to the Meta-designed platform thanks to its built-in connection to Instagram.
Twitter is currently struggling because of its high debt load. Although the entrepreneur omitted a time frame for the 50% decline in ad revenue, Mr. Musk claimed at the weekend that cash flow remained negative.
He wrote on Twitter that “Need to reach positive cash flow before we have the luxury of anything else.”
According to Lucy Coutts, investment director at JM Finn, Mr. Musk will be able to turn Twitter around, “but it is just going to take longer.”
However, he must pay off $13 billion in debt by the end of July, so if he is forced to sell more of his shares in Tesla, the pressure on the stock may increase.
Tesla, a manufacturer of electric vehicles, will release its most recent quarterly financial data on Wednesday. Mr. Musk serves as both the CEO and largest shareholder of Tesla.
Mr. Musk claimed that Twitter was on schedule to report $3bn (£2.29bn) in revenue in 2023, down from $5.1bn in 2021, after firing thousands of staff and reducing cloud service costs.
The latest indication that aggressive cost-cutting measures have not been sufficient to encourage sponsors who left after the company’s content control guidelines changed is this development.
In spite of that, Mr. Musk claimed in an interview with the BBC in April that most people had visited the site again.
Meghana Dhar, the former head of partnerships at Snap and Meta, the firm that owns the new Twitter rival Threads, however, claimed that the company had been having problems even before Elon Musk purchased it.
She said on the BBC’s Today show, “Elon and Twitter are in an incredibly difficult position right now. To be fair to Elon, though, we have observed a reduction in Twitter revenue as well as a gain in revenue since before Elon.
Linda Yaccarino, formerly the head of advertising at NBCUniversal, was appointed CEO of Twitter in June, indicating that the firm still places a high importance on advertising sales.
According to Ms. Yaccarino, Twitter intends to concentrate on video, creative, and business collaborations. It is rumored to be in preliminary discussions with public figures in politics and entertainment, payment providers, and news and media companies.
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