Musk warns Twitter bankruptcy possible days after the acquisition of the platform. What happened though? Elon Musk, the new owner of Twitter, suggested on Thursday that the social media site might go bankrupt, capping a chaotic day that also saw senior executives who were expected to become future leaders leave their positions and a warning from a U.S. regulator.
Musk warns Twitter bankruptcy possible days after the acquisition of the platform
Two weeks after purchasing the company for $44 billion, according to credit experts, the billionaire told Twitter employees on a conference call that he could not rule out bankruptcy, according to Bloomberg News.
Yoel Roth and Robin Wheeler, two executives who presided over Musk’s attempt to allay advertisers’ fears during a Twitter Spaces chat on Wednesday, have quit, a source close to the situation told Reuters.
Requests for response from Roth and Wheeler were not immediately entertained. The exits were initially reported by tech website Platformer and Bloomberg.
Lea Kissner, the head of security at Twitter, announced her resignation earlier in the day on Thursday.
Damien Kieran, Twitter’s chief privacy officer, and Marianne Fogarty, its chief compliance officer, both submitted their resignations, according to an internal message posted on Thursday to Twitter’s Slack messaging platform and obtained by Reuters.
After these three privacy and compliance managers left Twitter, the US Federal Trade Commission declared that it was keeping “close watch” on the social media platform. Due to these resignations, Twitter may be in violation of legal requirements.
According to the Information, Musk warned that the company could lose billions of dollars in the upcoming fiscal year in his first meeting with all Twitter employees on Thursday afternoon.
After Musk warns Twitter bankruptcy possible, requests for comment on a prospective bankruptcy, the FTC warning, or the departures were unanswered by Twitter.
After Musk took over, Wheeler served as the face of Twitter’s advertising campaign. According to Roth, who oversaw safety and integrity at Twitter, there are now 95% fewer views of hazardous information in search results than there were before to Musk’s acquisition.
After purchasing Twitter for $44 billion on Oct. 27, Musk brutally sought to purge the firm, claiming it was losing more than $4 million daily in part due to advertisers leaving after he took charge.
With a $13 billion debt load from Musk, Twitter will have to pay close to $1.2 billion in interest over the course of the following year. The payouts are greater than Twitter’s most recent cash flow disclosure, which was $1.1 billion as of the end of June.
Last week, Musk announced plans to cut the company’s workforce in half, pledged to eliminate fake accounts, and announced plans to charge $8 per month for the Twitter Blue service, which will include a blue check verification.
“We are tracking recent developments at Twitter with deep concern,” the FTC’s director of public affairs, Douglas Farrar, told Reuters.
“No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them,” Farrar added.
In May, Twitter agreed to pay $150 million to resolve FTC claims that it utilized users’ private information, such as phone numbers, for advertising purposes while claiming them the data was only gathered for security.
The lawyer recounted hearing Twitter’s general counsel Alex Spiro indicate that Musk was willing to accept a “huge amount of risk” with Twitter in the internal note referred to above. The lawyer cited Spiro as stating, “Elon puts rockets into space, he’s not afraid of the FTC.”
An inquiry for Twitter’s comments on the lawyer’s note and the departures was not answered. A request for comment from Spiro did not receive a prompt response.
The acquisition of Twitter has raised worries that Musk, who frequently enters political discussions, may come under pressure from nations attempting to regulate online speech.
According to U.S. President Joe Biden, Musk’s “cooperation and/or technical relationships with other countries is worthy of being looked at.”
Speaking about Twitter’s Spaces feature on Wednesday, Musk said that his goal was to make the site a force for the truth and eliminate bogus accounts.
His assurances might not be sufficient because Musk warns Twitter bankruptcy possible. In order to better understand the path the platform would take under its new leadership, Chipotle Mexican Grill said on Thursday that it had withdrawn its paid and owned content from Twitter.
It joined other companies, like as General Motors, that have suspended their Twitter advertising due to concerns that Musk will relax content management guidelines.