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Elon Musk Says Twitter Could Be ‘Cash-Flow Positive’ Within Months

I guess those in the mainstream media (basically everybody) who said he would wreck the company had it slightly wrong. Shocker. There may be hope for a neutral place to exchange ideas.


No if we can get Musk to throttle back the crazy rhetoric and shut the f-ck up once in a while?


Elon Musk Says Twitter Could Be ‘Cash-Flow Positive’ Within Months

CEO says company faced ‘massive decline in advertising’ and could have gone bankrupt if he didn’t cut costs


Twitter was on track to be $3 billion in the red when Elon Musk took over, the CEO said.


By Alexa Corse and Alexander Saeedy, WSJ

March 7, 2023 5:43 pm ET


Elon Musk said Twitter Inc. has a shot at being cash-flow positive next quarter, and he is optimistic about the company’s future after what he called a difficult past few months.


“I definitely don’t want to count chickens before they hatch,” he added Tuesday about his latest expectations for the company’s financial situation.


Mr. Musk, who acquired Twitter and took over as its chief executive in October, said the company would have gone bankrupt in four months if he hadn’t taken steps to rein in the company’s expenditures. Many advertisers pulled back from the platform after Mr. Musk’s takeover, and he said on Tuesday that Twitter had faced a “massive decline in advertising.” He also said Twitter faces around $1.5 billion in yearly interest payments on debt borrowed when he took the company private.


Mr. Musk made his comments during the Morgan Stanley Technology, Media and Telecom Conference in San Francisco, speaking mostly about Twitter but also mentioning other topics across his business ventures, including electric-vehicle maker Tesla Inc. and rocket-and-satellite company Space Exploration Technologies Corp., known as SpaceX. The billionaire is also chief executive of Tesla and SpaceX.


He was interviewed by Michael Grimes, head of global technology investment banking at Morgan Stanley. Mr. Grimes advised Mr. Musk on his acquisition of Twitter, according to court filings.


“It’s been a very difficult four months, but I’m optimistic about the future,” Mr. Musk said.


Twitter’s revenue and adjusted earnings dropped by approximately 40% year-over-year in December, The Wall Street Journal previously reported.


As Mr. Musk took over at Twitter, the company was on track to be $3 billion in the red given the decline in advertising and debt-service costs, Mr. Musk said. “In the absence of action, Twitter would have had six billion in cost and three billion in revenue,” he said. He said Twitter has since significantly reduced costs, including by reducing its spending on cloud services.


Some of the causes behind Twitter’s revenue decline were cyclical as well as “political,” Mr. Musk said, without elaborating.


Elon Musk, who bought Twitter in October, said the likely time to put in place a new person to take over the day-to-day management of the social-media platform could be toward the end of 2023. He spoke remotely at the World Government Summit in Dubai. Photo: Kamran


Twitter’s operating costs are now close to $1.5 billion, and Twitter still faces around $1.5 billion in annual interest payments on the $13 billion in debt the company borrowed when it was taken private, Mr. Musk said Tuesday. He had previously said he expected Twitter to be roughly cash-flow break-even in 2023.


Mr. Musk said it has been difficult to keep Twitter running daily while also trying to innovate its core products, citing a recent outage the company said was because of an internal change.


Twitter is running with a fraction of the staff it had before Mr. Musk’s takeover, after layoffs and other departures. Mr. Musk said in December that Twitter’s staff was down to roughly 2,000 from close to 8,000 from before his takeover. After additional layoffs in February, Twitter didn’t disclose its number of employees.


Today, Twitter earns around 5 to 6 cents an hour spent by its users on the platform, Mr. Musk said. “I think this is poorly monetized,” he said, adding that he hopes to at least triple how much it earns through more relevant forms of advertising.


“I think the potential here for Twitter revenue is gigantic,” Mr. Musk said.


In response to Mr. Musk’s takeover of Twitter, some advertisers had concerns about Mr. Musk’s approach to content moderation and worried that their ads would end up appearing near controversial content, the Journal previously reported.


Mr. Musk also spoke about brand safety Tuesday, saying his focus is on allowing advertisers to choose what material their ads appear next to.


Asked about Twitter’s management team, Mr. Musk said it takes a long time to build a strong management team. “I don’t know, probably a few years,” he said.


He previously suggested he could find a new Twitter chief executive toward the end of the year.


Write to Alexa Corse at alexa.corse@wsj.com and Alexander Saeedy at alexander.saeedy@wsj.com



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