Twitter continues to lose cash on account of its promoting income falling by virtually half and the consequences of a heavy debt load, Elon Musk has confirmed.
The billionaire tycoon, who acquired the social media platform in a $44 billion takeover final 12 months, offered apparently conflicting updates on its monetary well being over the next months. After warning in November that the group was preventing for survival, Musk claimed in April that it was virtually breaking even after he had drastically minimize prices and laid off hundreds of workers.
Responding to a Twitter consumer who prompt on the weekend that he ought to type a consortium to purchase the corporate’s debt, Musk, 52, wrote: “We’re nonetheless unfavorable money stream, attributable to ~50% drop in promoting income plus heavy debt load. Want to succeed in constructive money stream earlier than we have now the posh of the rest.”
He stated in one other tweet on Sunday that the corporate had not skilled the rise in promoting income he had anticipated in June, though he added that this month appeared “a bit extra promising”.
Issues over lax content material moderation, together with Musk’s plans for Twitter, led to an exodus of advertisers that didn’t need their adverts showing subsequent to inappropriate posts. Within the second quarter of 2022 — the final for which Twitter filed outcomes as a public firm — it generated promoting income of $1.08 billion, amounting to 91 per cent of its complete gross sales.
ARK Funding Administration, the funding automobile of Cathie Wooden, a number one supporter of Musk, has written down its stake in Twitter by 47 per cent for the reason that takeover. Wooden advised The Wall Road Journal that she remained bullish on Twitter’s long-term prospects, nevertheless. “The writedown will not be consultant of our basic outlook and perception within the long-term return on funding we imagine that it’ll have for our shareholders,” she stated.