Heavy debt, negative ad spends and more: Twitter has ‘problems’, says Elon Musk

It has been 10 months since Elon Musk acquired Twitter and it has been nothing but a boring ride. The first few months were all about sacking people left, right and centre. And, of course, there was this hullabaloo over Twitter Blue. Things never seemed to have settled down but in April this year, Musk proclaimed that all advertisers were back. However, that seemed to be short-lived as Musk in a tweet admitted Twitter having quite a few financial issues.
In a reply to a tweet, Musk said that “We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load.”He also said that Twitter needs to “reach positive cash flow before we have the luxury of anything else,” he added.
The heavy debt load comes from the money Musk borrowed to acquire Twitter. It has been reported that Twitter pays close to $1.5 billion in annual interest payments.
Other sources of revenue
Earlier this year, Musk hired Linda Yaccarrino as the new CEO of Twitter. Musk and CEO Yaccarino in an investor presentation last month said that the social media company is now planning to focus on videos, creator and commerce partnerships to bolster the company’s business. As per a report by The Financial Times, one of the slides said that vertical video accounted for more than 10% of time spent on Twitter. Musk had also announced that a Twitter video app for smart TVs was also coming. While replying to a person who said that he would like to watch an hour-long video on smart TV and not on Twitter app, Musk replied, “It’s coming”.
According to the report, the chief executive is in talks about a broader partnership with Google that would include advertising and access to some of Twitter’s data.