In many instances you will like a product or service and that is good for you as a consumer. If you are an investor, you want to know about the business model and how the company makes money. If it is easier and you understand how profits are made, it is worth considering. If the company does not make money, you should be patient and see if it can make money.

In an article from Reuters, Twitter is a social media site and millions of people use it and they like it. However, as a business, the business model is to make money for advertisements. If you use Twitter you can see how many ads are coming onto your feed and the value for you. Last year, Elon Musk, who is one of the wealthiest people on the planet bought Twitter for reasons that made sense to himself. In mid July he reported Twitter’s cash flow remains negative because of a 50% drop in advertising revenues and a heavy debt load.

In March, Mr. Musk believed Twitter would be cash flow positive by July, his forecasts are way off. However as one of the wealthiest people, he could cash in some Tesla shares and pay off the debt.

Twitter’s annual debt payment is $1.5 billion

Twitter in the last 6 months has let many employees go in an effort to cut costs. Twitter has reduced its non-debt expenditures to $1.5 billion from $4.5 billion.

Twitter was on track to post $3 billion in revenue down from $5.1 billion in 2021.

Linking to dividend paying stocks, if a company does not make money you can be very patient before you consider investing. There maybe reasons why you want to invest, but being patient saves you money. In the meantime, Twitter has more competition including from Meta’s Threads. We all read about companies and we gain an interest, but being patient means to do your homework before and have a medium to long term view. If you miss the short term jump, so what? you are more interested in will the company be functioning in 5 years. If a company is not cash flow positive do you think it will be operating?

There are more questions than answers, till the next time – to raising questions.