Elon Musk has been in a continual battle to make Twitter’s cashflow positive since he took over the social media site last year. He seems to think July, nine months after he took charge, could be the fateful month.
Of course, he said in March that June could be the month Twitter goes into the black. The company has failed to recover ad dollars from brands that abandoned the site following Musk’s takeover and his continued overtures to right-wingers online.
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.
— Elon Musk (@elonmusk) July 16, 2023
Another reason for Twitter’s poor cash flow is its “heavy debt load,” said Musk.
We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.
— Elon Musk (@elonmusk) July 15, 2023
That heavy debt load is not helped by the alleged US$500 million (around AU$734 million) that Twitter owes the thousands of employees laid off by Musk following the takeover.
Last week, Twitter announced plans to pay content creators in a scheme that rewards the biggest tweeters on the platform above all else. In order to qualify as a creator on the scheme, users need to have at least five million impressions on their posts in each of the last three months and pass a “human review” in accordance with the platform’s Creator Monetisation Standards.
Right-wing blogger Ian Miles Cheong tweeted that he has earned US$16,259 (AU$23,831) from the creator program already.
How Musk will manage to square the circle of paying creators, ex-employees and making the company cash flow positive at a time when ad dollars — which accounted for as much as 90 per cent of Twitter’s income before he took over — remains to be seen.
