Elon Musk, CEO of Twitter Inc., stated that the platform was on track to reach $3 billion in negative cash flow before the recent round of severe cost-cutting. “That is why I spent the last five weeks cutting costs like crazy,” Musk said during a Twitter Spaces hosted late Tuesday.
“This company is like, basically, you are in a plane that is headed toward the ground at high speed with the engines on fire and the controls don’t work.”
Musk purchased Twitter in October for $44 billion. The deal was partially funded with nearly $13 billion in debt and interest payments of approximately $1.5 billion per year.
Musk has cut costs, including the layoff of more than half the staff at Twitter. He also confirmed that he would resign when a suitable replacement is found as chief executive officer.
Musk stated that Twitter was on track to generate revenue of approximately $3 billion and had around $1 billion cash in its balance sheet.
Elon Musk stated that he now believes Twitter will be “alright next year” and expects the company “roughly to” reach cash flow break-even.
Musk said that advertisers are asking tough questions about the return on their investment in buying ads on Twitter.
According to Bloomberg analysts, Twitter had a potential revenue of $5.2 billion in fiscal 2022 before Musk took the company private.