San Francisco, CA — Twitter’s financial position has rapidly deteriorated since Elon Musk completed his $44 billion takeover of the social media platform in late October. In a company-wide email sent to Twitter employees on Wednesday, Musk stated that Twitter has experienced a massive drop in revenue, writing, “Twitter’s current revenue is about $1M per day after growing to $3M per day under Parag Agrawal’s leadership.”
This represents a 50% decline in Twitter’s advertising income, which makes up over 90% of the company’s revenues. Musk added that “Twitter is now in the fast lane to bankruptcy unless some things change.”
Industry analysts say the sharp decline is likely driven by advertisers pausing spending on Twitter due to brand safety concerns under Musk’s management. Top brands, including General Mills, Audi, and Pfizer, have suspended marketing campaigns on the platform.
Musk also warned employees that Twitter’s current cash flow is negative, after being around break-even before the acquisition. This means the company is currently burning through its cash reserves to operate.
Since taking over Twitter less than one month ago, Musk has instituted controversial changes, including firing over 50% of the workforce, introducing a new $7.99 Twitter Blue subscription, and altering content moderation policies.
These factors appear to be alienating both users and advertisers. Twitter’s stock is currently trading at around $37 per share after being acquired by Musk for $54.20 per share. Musk urged employees to be cautious with expenditures given the “economic picture ahead.”
With its financial situation looking increasingly bleak, Twitter faces an uphill battle to return to stability and growth under Musk’s leadership. But the CEO remains outwardly optimistic, telling workers that “With the changes we are making, Twitter has an excellent chance of being an extremely valuable company.”