How are Twitter's finances going since Elon Musk's controversial takeover? If a new report from the Wall Street Journal is anything to go by, not so great.
Because Musk took the company private in October, it can be tricky to glean its shaky finances from the outside.
But now, sources tell the WSJ that Twitter took a major hit in December, with both revenue and adjusted earnings plummeting by a shocking 40 percent year-over-year, according to an update to investors.
Likely the biggest culprit for the sizeable dent in its earnings was the exodus of panicked advertisers, who feared an uptick of hate speech and harmful content on the platform due to Musk's supposedly lax stances on "free speech." as well as being scared off by the controversy Musk constantly incited — and continues to stir.
According to an analysis conducted by Pathmatics, which the WSJ cites, more than 70 of Twitter's top 100 advertisers have paused spending money on the platform.
Prior to Musk's takeover, the advertisers accounted for around 90 percent of Twitter's revenue. To say they will be sorely missed would be an understatement.
Ignorance Is Bliss
Nevertheless, either out of sheer ignorance, hubris, or an attempt to maintain a semblance of control, Musk maintains that, actually, he's steering the company's finances admirably.
At a Morgan Stanley conference held on Tuesday, Musk claimed Twitter would've gone bankrupt "in four months" if it weren't for his aggressive cost cutting, which includes firing over half his workforce and refusing to pay rent or even bills.
"In the absence of action, Twitter would have had $6 billion in cost and $3 billion in revenue," he said, as quoted by The New York Times.
Musk was happy to take credit for those gains, but sidled around owning up to the advertiser-shaped hole in Twitter's revenue, calling its decline "cyclic," "political," and blamed the media for the advertisers' loss of faith, according to the NYT.
"Believe what you see on Twitter and not what you see in newspapers," he said.
In other words, it certainly doesn't look like a company that's on the mend.
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