Twitter could be cash-flow positive by second quarter of 2023 — Elon Musk

3 years ago 1

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Twitter Inc. may break even on a cash-flow basis in the second quarter and has a shot at even going positive, according to owner Elon Musk.

The company has been working on making its advertising more relevant, said Musk, speaking at a Morgan Stanley conference in San Francisco on Tuesday.

Musk, who bought Twitter last year for $44 billion, emphasised that Twitter’s debt burden after the deal is quite high and the cost of servicing the debt is around $1.5 billion annually, about equivalent to its current cash burn rate.

With all the attention Twitter receives, it’s “startling” how little money it makes, he said.

Musk said Twitter is profitable based on Ebitda, or earnings before interest, taxes, depreciation and amortisation, but emphasises the “D” is quite big and they need to focus on the “E” part.

Musk has a longstanding relationship with Morgan Stanley.

The investment bank has led or co-led several of Tesla’s offerings, including a $2 billion offering in 2020, and oversaw the effort to line up debt financing for the Twitter deal.

Then Morgan Stanley, along with other banks, struggled to offload the Twitter debt to outside investors.