Elon Musk Says Twitter's Overhaul Boosted its Finances

It has been a roller coaster for Elon Musk on Twitter for the past six months, but he said that with his overhaul of the platform, he could be able to bring the company back to a cash flow positive position as soon as the fourth quarter.

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During an interview with the British Broadcasting Corporation, which was streamed live from the headquarters of Twitter's San Francisco division, Mr. Musk said that when he took over the company in October, it was on track to generate $3 billion in annual revenue. Despite this, there were $6 billion in annual expenses for the company, including $1,5 billion for debt servicing.

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"Twitter is on track to lose three billion dollars a year, and they have one billion in the bank, so that means they are only four months away from going under," he said. “So that’s your starting point.”

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Musk quickly slashed the number of jobs at the company. It is estimated that Twitter now has about 1,500 employees, down from just under 8,000 when he took over the company. In the midst of cutting costs, the company has also returned many of the advertisers who had previously left Twitter, a factor that has forced it to break even, he said.

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According to Musk, Twitter's workforce has dropped to a little over 2,000 employees, and he expects that the company will break even in 2023 roughly in terms of cash flow.

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As of now, Twitter has not disclosed its financial details publicly since going private, and the losses described by Mr. Musk in the BBC interview would mark a sharp decline in the company's performance from where it was in the past. Twitter recorded a profit in 2019, and the company's net loss fell from $1.14 billion in the previous year to $221.4 million in 2021, from $1.14 billion the year before. The company reported a quarterly loss of $270 million in the second quarter following the announcement of Mr. Musk's plans to take the company private in July. Part of the reason for this was the uncertainty of advertisers over the proposed deal.

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Mr. Musk used the term "soap opera" to describe his attempt to buy Twitter. After initially making an offer to buy Twitter, he changed his mind, he said, because he believed the company was inaccurate in counting its users, despite the fact that it had made an offer for it. He explained that he ultimately went through with the deal because he believed that a court would eventually compel him to do so. For the purpose of financing his $44 billion deal to purchase Twitter, which closed in October, he sold some of his Tesla Inc. shares, which are his electric-vehicle company.

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One of the first moves Mr. Musk took after taking over was to reinstate the account of the former president of the United States, Donald Trump, who has not tweeted since the move was made. Despite this, Musk claimed that he had not spoken to him. "It is not certain whether he will come back or not. Twitter should be viewed as a town square that gives equal voice to everyone in the country and, ideally, to every citizen in the world."

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Moreover, Mr. Musk addressed complaints from staff members of the BBC and National Public Radio, who complained that the Twitter accounts of those organizations should not be labeled as “government-funded media.” He said that in his opinion, these labels should read “publicly funded.” 

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In the tweet, Musk said he was no longer the chief executive officer at Twitter, joking that his dog, Floki, actually held that position in a more formal sense. Right now, he said he did not have anyone in mind to take over as the head of Twitter.

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Musk announced his intention to step down as CEO in December after a poll he conducted on the company's future leadership ended up with a majority of respondents calling for him to hand over control of the company.

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When asked by the BBC whether he would support a request by the U.S. government to impose a ban on TikTok, the Chinese-owned rival of Facebook, Mr. Musk only paused for a moment. "I suppose it would help Twitter if TikTok were banned because then people would spend more time on Twitter and less time on TikTok," he said at one point. "However, even if it is for the sole purpose of helping Twitter, I would generally oppose any move to ban things in general."