Musk says a 50% drop in ad revenue for Twitter is causing negative cash flow

The bad news keeps piling on for Twitter owner Elon Musk. His $44 billion investment in Twitter is just not working out yet and Mark Zuckerberg's Meta is signing up subscribers for newly minted Twitter rival Threads at a rapid pace. Threads has a huge advantage because of its Instagram integration. New Threads subscribers must have an Instagram account to join; Instagram has over 1 billion monthly active users  and a large number of that platform's subscribers will open a Threads account, a process that is quick and easy to do.

Today, Musk revealed some more bad news in the form of a tweet that said, "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." Negative cash flow means exactly what it sounds like. More cash is leaving the business than is coming into it. On the other hand, he also said yesterday that it "Looks like this platform may see all-time high device user seconds usage this week."

Advertisers might not be happy with the mess that Musk has created at Twitter as he monetized verification checkmarks and kept reversing company policy. He also put a cap on the number of tweets users can read in a day only to raise that cap hours later. It is this kind of instability at Twitter that has advertisers pulling back. Back in April, Musk said that advertisers were coming back and that cash flow would soon turn positive. So far, it hasn't. At the time, Musk said about his advertisers, "Almost all of them have either come back or said they’re coming back."

According to app research firm Sensor Tower, during a two-month period earlier this year, Twitter's advertising revenue plunged by 89% to $7.6 million. Compare that figure to the $71 million that the top ten Twitter advertisers spent on ads from September to October of last year just before Musk's acquisition of the platform.