Elon Musk is optimistic about Twitter's operation, but claims he would have faced a ``negative cash flow of 400 billion yen a year'' without his own large-scale cost reductions

Elon Musk, who acquired Twitter and became CEO of the company, drastically reduced the number of employees from 7,500 to 2,700 due to large-scale personnel reductions, and displayed a blue check mark next to the account name . We are implementing bold profit improvement measures such as selling badges for a fee . Mr. Musk argued that without this profit improvement measure, Twitter would have faced `` negative cash flow of $ 3 billion annually ''.

Elon Musk blames cost cuts at Twitter on '$3bn negative cash flow' | Financial Times
https://www.ft.com/content/3ec97c05-eaea-4c7f-bdf4-50547fff3c19

Elon Musk blames Twitter cost cuts on “$3 billion negative cash flow” | Ars Technica
https://arstechnica.com/tech-policy/2022/12/elon-musk-blames-twitter-cost-cuts-on-3-billion-negative-cash-flow/

Mr. Mask participated in the Twitter space hosted by George Hotz, president of comma.ai , and explained Twitter's profit improvement measures, which are controversial from the public.

https://t.co/d0jca4AYhC

— George Hotz???? (@realGeorgeHotz) December 21, 2022

Mr. Mask said about the situation of Twitter when he acquired himself, 'We are like doing an emergency fire drill. Twitter is effective in maneuvering to fall to the ground at high speed with the engine on fire. It was like an airplane that didn't exist.' In addition, ``That's why I took actions that may seem impure at times,'' Musk said, saying that the profit improvement measures taken on Twitter were unavoidable given the situation on Twitter. claimed.

According to Musk, Twitter was planning to spend about $5 billion (about 660 billion yen) in 2023. According to the 2021 income and expenditure report before Twitter was taken private, the company recorded spending of $ 5.6 billion (about 740 billion yen) in 2021, and $ 221 million (about 290 million yen). 100 million yen).

If Mr. Mask does not take measures to improve profitability after the acquisition, `` Twitter's net cash outflow will increase from $ 6 billion (about 790 billion yen) in 2022 to $ 6.5 billion (about 860 billion yen) in 2023 This would have meant that Twitter had $12.5 billion in debt to finance the acquisition, and about $1.5 billion in annual debt amid rising interest rates. Partly because I had to pay it back, Twitter has $1 billion in cash, so no good, so I went crazy for 5 weeks to cut costs. ,” Musk said.

Twitter was tracking to spend $5bn next year, says Elon. Also, because of debt on transaction, $1.5bn debt servicing required. With revenue tracking to $3bn. 'So that's like a negative cash flow situation of -$3bn next year. Not good.'

— Ashlee Vance (@ashleevance) December 21, 2022

In response to Mr. Mask's remarks, the economic media Financial Times said, ``Mr. Musk's remarks suggest that Twitter was aiming for annual sales of about $ 3 billion in 2023. Sales were $5 billion, suggesting that sales will be $2 billion lower in 2023. This is clearly due to the decline in advertising revenue, and Mr. Musk 'Since our acquisition of Twitter, advertisers have left Twitter due to the company's instability.'

Mr. Musk has mentioned Twitter's poor revenue situation even before the acquisition, but in the Twitter space, 'By making changes to significantly improve the burn rate and increase the revenue from subscribers, I think Twitter will be fine next year,' he said, appealing that Twitter's business situation has recovered due to his own profit improvement measures.