Elon Musk on Tuesday night said that Twitter was on course for $3 billion of negative cashflow before he stepped in and nuked more than half the company. Twitter itself, meanwhile, is operating better than ever – with a significant reduction in bots, and increases in speed.
“That is why I spent the last five weeks cutting costs like crazy,” Musk said during a Twitter Spaces event. “This company is like, basically, you are in a plane that is headed toward the ground at high speed with the engines on fire and the controls don’t work.“
The state of Twitter’s finances from the horse’s mouth (pls don’t ban me @elonmusk 🐴).
Love this level of transparency. Thanks for hosting @realGeorgeHotz 🌟 pic.twitter.com/NSRvFoZhb0
— Sam Golden (@GoldenGatsby) December 21, 2022
Since Musk acquired Twitter in October for $44 billion – financing the deal in part with nearly $13 billion of debt and interest payments of $1.5 billion per year, he has set out on a mission to cut costs and revamp the social media giant, which he said was losing $4 million per day as of early November, and was at risk of going bankrupt.
Roughly 5,000 of the company’s 7,500 employees have been fired, with the remaining workers agreeing to a “hardcore” work ethic, Bloomberg reports.
Over the weekend Musk conducted a straw poll on Twitter asking people if they wanted him to resign as the company’s top executive. About 58% of respondents said yes and Musk has since confirmed he’d step down once an appropriate replacement was found, for a job he’s said anyone would be “foolish” to take.
In the Twitter Spaces event, Musk painted a dire picture of the company’s finances but suggested that he has managed to avert a total meltdown. -Bloomberg
In 2021, Twitter’s costs totaled nearly $5.6 billion, while Musk said the company was on track to spend around $5 billion next year. When combined with the acquisition-tied debt repayments, Twitter would be looking at around $6.5 billion in 2023 expenses had costs not been slashed so drastically.
According to Musk, Twitter is now on track to bring in around $3 billion in revenue in 2023 – roughly $2 billion less than the $5.1 billion reported at the end of 2021, while the company has $1 billion in cash on its balance sheet.
“I now think that Twitter will, in fact, be okay next year,” Musk continued during the Spaces event, adding that he thinks the company will “roughly” break-even, but that “this will be difficult.”
He says advertisers have been asking “sane” but “tough” questions about their return on investment, Bloomberg noted.
Musk has also been making changes to the platform to increase and diversify its revenue, including charging $8 a month for a premium subscription called Twitter Blue. As of mid-November, there were about 140,000 paying subscribers, according to the New York Times.
Twitter has always had a hard time converting conversation among its users into revenue, but with all his antics, Musk has managed to make the company as buzzy as it’s ever been. -Bloomberg
Meanwhile, Politico think it’s time to ‘close down the Elon Musk circus,’ calling his ‘antics’ nothing more than ‘flimflam stunts.’
“.. a rich publicity hound who goads reporters .. with his flimflam stunts, promises and predictions. His antics deserve some coverage, but .. it should be with a massive soundproof blanket to muffle his .. inconsequential braying.”
— Carl Quintanilla (@carlquintanilla) December 21, 2022
Dear Politico, the 50s called… they want Marty McFly’s dad back.