It was revealed by Twitter's owner, Elon Musk, that the company has lost roughly half of its advertising revenue since it was purchased by Musk for $44 billion (or £33.6 billion) last October.
He said that the business had not witnessed the boost in sales that had been anticipated for the month of June, but he added that July had been "a little bit more promising." When Mr. Musk assumed control of Twitter in 2022, he immediately began a cost-cutting initiative by firing around half of the company's 7,500 employees.
Some estimates put the number of users of the competing app Threads at 150 million at this point. The platform that was established by Meta has an in-built connection to Instagram, so it automatically has access to Instagram's potential user base of two billion people.
In the meantime, Twitter is having trouble managing its substantial amount of debt. Mr. Musk stated over the weekend that the company is still operating with a negative cash flow, although the billionaire did not provide a time frame for the decline in advertising revenue of 50%.
Lucy Coutts, investment director at JM Finn, told sources that she believed Mr. Musk could turn Twitter around, but it will take longer. "However, he has $13 billion of debt due by the end of July, so if he is forced to sell more of his Tesla shares, we may see more pressure on the shares of that company."
Mr. Musk is also the CEO and majority shareholder of electric vehicle manufacturer Tesla, which will release its most recent quarterly financial results on Wednesday.
Mr. Musk stated that Twitter was on track to earn revenue of $3 billion (£2.29 billion) in 2023, down from $5.1 billion in 2021, after the company laid off thousands of staff and reduced its bills for cloud service.
This recent development is more evidence that the extreme cost-cutting efforts implemented by the company have not been sufficient to entice the return of advertisers who left the company after revisions were made to its content moderation standards.
This is despite the fact that Mr. Musk stated that the majority of people have returned to the site back in April. However, Meghana Dhar, a former head of partnerships at Snap and Meta, the company that controls the new Twitter competitor Threads, stated that the company was experiencing difficulties prior to Mr. Musk's acquisition.
She stated that Elon and Twitter are in a difficult position at present. She also mentioned that to be fair to Elon, they have seen a decline in Twitter's revenue and development in revenue since before he joined the company - it has been a gradual decline.
It was announced in June that Linda Yaccarino, who had most recently served as the president of advertising sales at NBCUniversal, would be taking over as chief executive of Twitter. This decision indicates that advertising sales will continue to be a focus for the company.
According to Ms. Yaccarino, Twitter intends to place a greater emphasis on video, creative, and commerce collaboration opportunities. It is reported that preliminary discussions are taking place with political and entertainment personalities, payment services, and publishers of news and media.