Since Elon Musk’s takeover in late October, the Twitter business has continued to experience a painful transformation, with new data suggesting the billionaire is being forced to continue layoffs after promising to stop. Additionally, it was revealed that the company’s revenue fell nearly 40% in December last year compared to the same period in 2021.
Image source: Shelby Knowles, The Wall Street Journal
This publication reports The Wall Street Journal with a link to an internal Twitter feed for investors. Alongside a 40% decline in sales, the company’s adjusted earnings also showed similar momentum. Back then, many of the advertisers stopped working with Twitter, waiting for some kind of business stabilization in the wake of active reforms being carried out by Elon Musk. In 2021, advertising revenue accounted for 90% of Twitter’s revenue, but as of February 25 of this year, more than 70 of the top 100 former advertisers were not affiliated with the company.
In 2021, Twitter was a public company and did not share monthly revenue data, but in the fourth quarter of this year, it managed to raise $1.57 billion and net income of $182 million, billion that Elon Musk spent when buying a social network in the form of a loan at a not the lowest interest rate of 15% per year. The company recently had to make the first payment on this loan, the annual amount of payments may exceed $1 billion.
Last month, Elon Musk expressed his confidence that Twitter would end 2023 without a loss. Even before the transfer to the ownership of the mask, the company could not boast of profitability. Between 2012 and 2021, it ended the reporting period with a net loss on eight out of ten occasions and has not turned a profit since 2019. Now Elon Musk is trying to make paid subscriptions one of Twitter’s main sources of income, but it will take a long time for a stable financial flow to develop in this direction.
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