Musk: Twitter Ad Revenue Down 50% Since Takeover

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Facts

  • Twitter owner Elon Musk revealed that the company has seen a nearly 50% decrease in advertising revenue since Musk bought the platform for $44B last October. He said in a tweet: "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."1
  • The Tesla CEO made sweeping changes to Twitter after buying the platform, firing half of the company's 7.5K employees in cost-cutting measures and cutting cloud service bills, as he looks to pay off $13B in debt by the end of the month.2
  • Fleeing advertisers left Twitter with $1.5B in annual interest payments. In April, Musk said Twitter’s sweeping layoffs were a “painful" necessity to revive the company reeling from a “$3 billion negative cash flow situation” when he bought it.3
  • Musk also said in April that he believed Twitter would have a positive cash flow by the third quarter, with revenue reportedly down 59% — $200M — between April 1 and the first week of May year-over-year. CNN also reported that only 43% of Twitter’s top pre-Musk advertisers remained on the platform.4
  • Twitter’s expected 2023 revenue is $3B, down from $5.1B in 2021, and advertisers are believed to be leaving the app due to Musk’s pro-free speech policy of relaxing content moderation rules. Musk has tried generating subscription-based revenue to offset the costs in addition to the layoffs.5
  • In the face of the financial challenges and new competition from Meta’s new, Twitter-like app Threads, Musk stepped down as CEO and hired the NBCUniversal executive Linda Yaccarino. While Musk is taking most of the heat, rival executive Meghana Dhar says Twitter was experiencing steadily declining revenue well before Musk took over.2

Sources: 1The Hill, 2BBC News, 3FOX News, 4Daily Mail, and 5Reuters.

Narratives

  • Left narrative, as provided by Vox. Since buying the platform, Elon Musk has made a mockery of Twitter, driving away advertisers for many reasons. First, companies don’t want to be associated with a company that is at best indifferent to, and at worst complicit in, the promotion of hate speech that targets marginalized groups. In addition to the moral qualms with Musk’s free-for-all vision of Twitter, advertisers are rightly worried.
  • Right narrative, as provided by Mises Institute. The powerful woke cartel is striking back against Elon Musk, who dares to bring some semblance of free speech back into American life. The path to restoring free speech was never going to be easy, and Musk may have to play a little ball with the establishment, but the fight for this right remains as important as ever. Musk's efforts have been honorable.

Predictions