The Wall Street Journal reported Friday night that Twitter Inc. sustained a year-over-year decrease of approximately 40% in both revenue and adjusted earnings for December.
The report comes after a Jan. 24 Reuters story, citing data by Standard Media Index (SMI), which showed a collapse in advertising spend on the social media platform by 71% in December. Since Elon Musk’s takeover in October, there has been an exodus of advertisers.
At the time, SMI said Twitter’s ad business was beginning to stabilize after offering a “slew of initiatives to win back advertisers, offering some free ads, lifting a ban on political advertising and allowing companies greater control over the positioning of their ads,” Reuters said.
Musk has been focused on cutting costs since his takeover of Twitter was finalized on Oct. 27. As the self-appointed leader. He has supervised the firings of about half of the company’s 7,500 employees and the departure of senior executives while still actively seeking ways to streamline operations.
Last 3 months were extremely tough, as had to save Twitter from bankruptcy, while fulfilling essential Tesla & SpaceX duties. Wouldn’t wish that pain on anyone.
Twitter still has challenges, but is now trending to breakeven if we keep at it. Public support is much appreciated!
— Elon Musk (@elonmusk) February 5, 2023
Twitter’s future remains uncertain as it is required to repay some of the $13 billion of debt that was utilized during the takeover by Musk. WSJ reported that the annual interest payments on the debt exceed $1 billion, and the first payment to a group of banks, including Morgan Stanley, Barclays PLC, and Bank of America Corp, was recently completed.
Since Twitter went private after Musk’s acquisition, it no longer reports its financials to the SEC. This makes gaining insights into the company’s balance sheets more difficult.
Last month, Gizmodo said the “revamped Twitter Blue subscription service” is a “struggling product” for the company and has “fewer than 300,000 paying subscribers worldwide.”
Even though Twitter is reining in costs, a slump in the ad business and lack of mass adoption of Twitter Blue brings into question if some of the future high-interest debt payments will be paid on time..