Elon Musk Predicts Twitter Will Go Bankrupt as More Top Executives Leave

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After a turbulent day that featured a warning from a US regulator and the resignation of key employees seen as future leaders, Twitter’s new owner Elon Musk on Thursday highlighted the idea of the social media network going bankrupt.

Twitter’s finances are in jeopardy, according to credit experts, after its billionaire buyer put up US$44 billion (S$61 billion) to acquire the company two weeks ago.

Seven individuals who were present on the discussion claimed that Mr. Musk informed staff on Thursday that Twitter lacked the capital it needed to continue operating. Mr. Musk noted that the social media firm was generating a negative cash flow of several billion dollars every year.

In order to “rescue” Twitter, Mr. Musk said he had lately sold Tesla shares. Regulatory papers made this week reveal that he has sold over US$4 billion worth of Tesla stock in recent months.

Even after firing half of Twitter’s 7,500 workers last week, he claimed the firm was still overstaffed. The remaining staff needs to be more “hard core,” Mr. Musk added.

Two executives, identified as Mr. Yoel Roth and Ms. Robin Wheeler, have reportedly quit after moderating a Twitter Spaces discussion with Mr. Musk on Wednesday, during which he attempted to allay the fears of advertisers.

After Mr. Musk took over Twitter, Ms. Wheeler became the company’s public face.

According to Mr. Roth, Twitter’s former director of safety and integrity, dangerous material views in search results have been decreased by 95% since Mr. Musk’s purchase.

Lea Kissner, Twitter’s top security officer, announced her resignation on Thursday morning.

An attorney on Twitter’s privacy team wrote an internal message on Slack on Thursday stating that both the chief privacy officer Damien Kieran and the chief compliance officer Marianne Fogarty had left.

After the departure of these three privacy and compliance executives, the Federal Trade Commission (FTC) of the United States expressed “serious worry” about Twitter. As a result of these departures, Twitter may be in violation of existing laws and regulations.

When asked for comment on the possible bankruptcy, the FTC notice, or the departures, Twitter’s now-defunct communications team did not answer.

Mr. Musk, who assumed control of Twitter on October 27 and swiftly proceeded to clean house, has claimed that the firm is losing more than US$4 million per day, mostly due to the departure of advertisers.

Mr. Musk owes Twitter US$13 billion, and the interest on that debt will cost the company over US$1.2 billion over the course of the next year. The sum of the payments is more than Twitter’s cash flow of US$1.1 billion as of the end of June, the most recent period for which such data is available.

FTC head of public relations Mr. Douglas Farrar expressed “grave worry” about recent events at Twitter.

Companies are required to abide with our consent decrees, and no CEO or corporation is immune to the law. Mr. Farrar stated, “We are prepared to employ the additional instruments that our updated consent order offers us to guarantee compliance.”

Twitter settled FTC claims in May for US$150 million, admitting that it had utilized users’ phone numbers and other personally identifiable information for advertising purposes while assuring them that the data was being gathered for security purposes solely.

According to the above-mentioned internal email, Twitter’s chief legal officer Alex Spiro remarked that Mr. Musk was prepared to take a “great amount of risk” with the company. The attorney cited Mr. Spiro as stating, “Elon shoots rockets into space, he is not frightened of the FTC.”

Mr. Musk, who has often intervened in political arguments, may be subject to pressure from governments attempting to limit online speech in the wake of Twitter’s purchase, raising worries among some.

Mr. Musk’s “cooperation and/or technological partnerships with other nations is worthy of being looked at,” Vice President Joe Biden of the United States said on Wednesday.

Mr. Musk told advertisers on Twitter’s Spaces feature on Wednesday that he hoped to transform the social media site into a “force for truth” by eliminating phony profiles.

His reassurances might prove to be insufficient.

On Thursday, Chipotle Mexican Grill said that “until we have a better perspective on the future of the platform under its new leadership,” it has suspended all paid and owned content on Twitter.

It has halted advertising on Twitter with other firms like GM because of fear that Mr. Musk could relax controls on content management.

In his first email to Twitter staff on Thursday, Mr. Musk said that working from home would no longer be tolerated and that workers were required to be present in the office for at least 40 hours per week.

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