Musk’s Twitter: Cash Positive Despite Advertisers, Amazon, and the FTC? It Seems Like It

Musk’s takeover started with him cutting a massive number of Twitter’s staff, and from there, the cost-cutting measures have continued. He shut down data centers, eradicated entire departments, and even took the extreme and somewhat baffling measure of refusing to pay some of the company’s debts, including $70 million owed to AWS.

All of his actions have seemingly caught the attention of the FTC, which has sent more than a dozen letters to the social media company since Musk’s takeover. However, despite all of these things, along with advertiser troubles that continue to plague the platform, Musk is saying that Twitter has a chance to become cash flow positive.

Twitter Becoming Cash Flow Positive

Finding a way to make money has been Musk’s goal since he bought Twitter in October. While it seemed like a lost cause for some time, Musk is now reporting that there is a chance of the company becoming cash-flow positive in the second quarter. Moreover, Musk reported that it was despite the decline in advertisers.

What is more surprising is that the chance is presenting itself despite Twitter’s revenue being expected to drop by nearly a third. According to Musk, “if 2023 had been a normal year,” the company would have expected $4.5 billion in revenue, but the current expectation is around $3 billion.

Musk also went on to say that the decline could be reversed with more relevant advertising on the platform. He said, “We’ve been wasting people’s time,” and he plans to correct that and make advertising more useful, which will, in turn, increase revenue. There are also other plans in the works, including an “everything app” to provide financial services.

Still, the most significant factor might just be the extreme cost-cutting measures implemented since the takeover. Musk said that Twitter has reduced expenditures from around $4.5 billion to $1.5 billion, which includes cutting cloud spending by 40% and the layoff of 70% of its staff. Though, that has created some problems of its own, such as an FTC probe.

The FTC Is Sending Letters

The Federal Trade Commission has sent Twitter over a dozen letters since the takeover in regards to an investigation into the company. According to a report by the House Judiciary Committee, the letters have demanded several things, including:

• Requests to “identify all journalists” granted access to company records.
• Information on the launch of Twitter Blue.
• Personal decisions made by the company.
• All internal communications relating to Elon Musk.

The letters were sent in relation to the privacy consent decree Twitter is required to comply with. The FTC is concerned whether the social media platform has the resources they need to comply, particularly after the massive decline in staff.

However, the report by the committee said, “There is no logical reason why the FTC, on the basis of user privacy, needs to analyze all of Twitter’s personnel decisions. And there is no logical reason why the FTC needs every single internal Twitter communication about Elon Musk.”

While the FTC wants Musk to testify in connection with the probe, Musk tweeted that the entire thing is “a shameful case of weaponization of a government agency for political purposes and suppression of the truth!”

Whether the probe will impact Twitter’s chance of it becoming cash-flow positive is uncertain. After all, Musk does not seem to care what gets in his way on his path to making Twitter profitable. Perhaps Twitter will become the next promising Musk venture against all odds.