Elon Musk says Twitter “has a chance” to be cash flow positive next quarter, even as the social media network struggles with site disruptions and reports of advertisers leaving the platform.
In an interview at a Morgan Stanley investor conference Tuesday, the billionaire, who took over as CEO of Twitter in October 2022 after acquiring the company for $44 billion, spoke of Twitter’s admittedly bumpy trajectory in recent months, as well as about his eventual plans for the social media network.
“The reason I did the Twitter takeover wasn’t because I thought this would be a lucrative gold mine. In fact, it has been heavy and hard and gets dumped every day. Well, that’s not the nicest thing in the world. But if we don’t have a strong foundation of free speech, I fear for the future of our civilization,” Musk said.
(Morgan Stanley advised Musk on the acquisition and also contributed about $13 billion in debt financing.)
One of the problems has arisen because advertisers reportedly left the site en masse after bot attacks and fear of a higher level of hate speech on the platform after Musk promoted the idea of free speech for all. Since then, Musk has been trying to reassure advertisers about the platform.
At the conference, Musk highlighted Disney and Apple as remaining advertisers on the site, saying the team is focused on brand safety, but added that brand safety depends on the company (whether it’s family-friendly or not) and their ability to choose next to what kind of content they want to place their ads.
“It really is up to the advertiser where they want to place their content. But I think by far the most important thing is that the ad is effective, that it’s relevant and that it moves the needle for a company,” he said.
To that end, Musk said Twitter will focus more on relevance in ads. He wants to focus more on performance advertising and recently spoke with David Zaslav, CEO of Warner Bros. Discovery, about HBO’s ability white lotus trailers, for example every time the phrase “White Lotus” is tweeted.
As it stands, Musk called Twitter “poor revenue” given the amount of attention it commands. The company is also saddled with a large amount of debt, given the debt associated with Musk’s acquisition of the company, as well as the financial situation before Musk took the company private (in its latest report as a publicly traded company, Twitter reported a net loss of $270 million). Still, Musk said he believes there will be “a huge increase in sales” as ads become more relevant and useful.
“It has been a very difficult four months, but I am optimistic about the future,” he said.
As for further difficulty, Musk acknowledged that the site was down, including the most recent bug on Monday, which disrupted users’ ability to send links and view photos on the platform. He called Twitter’s code “a Rube Goldberg” machine.
“It’s kind of hard to keep this thing running. And then also difficult to move the product forward because it’s really too complex to say the least, and we’ll make a change, which seems to be a small change somewhere that then creates a huge disruption,” he said.
Twitter also reportedly laid off a significant portion of its workforce, according to the New York Times, bringing its workforce to less than 2,000 from 7,500 when Musk joined. Musk didn’t directly comment on the layoffs, but said he thinks it will take a few years for Twitter’s management team to look like his team at Tesla. (He called Twitter “a far easier problem than Tesla.”)
Musk has also said he eventually plans to use Twitter to build a social platform called “X.com” where users can send money to each other and earn interest on the money. “In principle, I think it is possible to become the largest financial institution in the world,” he said.