Musk Says Twitter May Be Cash Flow Break-Even in Second Quarter

Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., speaks during a discussion at the Satellite 2020 Conference in Washington, D.C., U.S., on Monday, March 9, 2020. The event comprises important topics facing both satellite industry and end-users, and brings together a diverse group of thought leaders to share their knowledge. , Bloomberg

Ed Ludlow and Dana Hull, Bloomberg News

Mar 7, 2023

Share

(Bloomberg) -- 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, emphasized 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 amortization, but emphasizes the “D” is quite big and they need to focus on the “E” part.

Read More: Musk Says Twitter May Be Cash Flow Break-Even in Second Quarter

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.

(Updates with Ebitda comment in third paragraph)

©2023 Bloomberg L.P.