Musk warns of Twitter bankruptcy as more senior executives quit
– As the day’s chaos culminated with a warning from a U.S. privacy regulator and the departure of the company’s trust and safety chief, Twitter Inc’s new owner Elon Musk on Thursday raised the idea of the social media site going bankrupt.
Two weeks after purchasing Twitter for $44 billion, credit experts warned Bloomberg News that the company’s finances were in jeopardy due to the transaction. The billionaire reportedly admitted as much during his first group call with staff.
Musk warns of Twitter bankruptcy as more senior executives quit
Musk sent out his first company-wide email earlier in the day, in which he expressed concern that Twitter might not “survive the upcoming economic downturn” if it did not increase subscription revenue to compensate for declining advertising income, according to three people with knowledge of the email who spoke with.
Two sources close to report that Yoel Roth, who oversaw Twitter’s response to fight hate speech, disinformation, and spam on the site, left on Thursday.
Roth labelled himself the “Former Head of Trust & Safety” on Thursday on his Twitter page.
Roth has ignored our attempts to get him to comment. Initial reports of his departure came from Bloomberg and the technology website Platformer.
Thursday morning, Twitter’s Chief Information Security Officer Lea Kissner announced her resignation through Twitter.
Obtained a copy of an internal Twitter message made on Thursday by an attorney on the privacy team announcing the resignations of Chief Privacy Officer Damien Kieran and Chief Compliance Officer Marianne Fogarty.
Contrary to previous media reports, senior ad sales executive Robin Wheeler notified staff in a note that she was remaining at the business, a source familiar with the message said.
Late on Thursday, Wheeler tweeted, “I’m still here.”
After losing its three privacy and compliance officials, the FTC in the United States declared its “great concern” about Twitter.
Due to their departures, Twitter may be in violation of regulatory requirements.
Late on Thursday, Musk’s lawyer Alex Spiro reassured several staff through email that Twitter would continue to follow the rules.
Today, we engaged with the FTC about our continued commitments, and we have a good ongoing communication, Spiro stated.
He said that the directives only applied to Twitter and not to any of its workers individually.
Employees “who do not even work on the FTC problem” at Twitter “commented that they could (go) to prison if we were not in compliance,” he said.
According to the Information, Musk expressed concern that Twitter might lose billions of dollars in 2019, in his first meeting with numerous staff on Thursday afternoon.
In his email to employees, Musk said that they would be required to be present in the office for at least 40 hours a week, and that remote work would be prohibited.
Requests for comment on the possible bankruptcy, the FTC notice, and the departures were not met with a response from Twitter, Musk, or Spiro.
After taking control on October 27th, Musk moved swiftly to clean house, claiming the firm was losing over $4 million per day due to the exodus of advertising.
Due to the agreement, Twitter now owes $13 billion and must pay about $1.2 billion in interest over the next year. Payments surpass Twitter’s cash flow of $1.1 billion as of the end of June, the most recent period for which cash flow data was made public.
For his Twitter Blue service, which includes a blue check verification, Musk is now charging $8 per month.
WARNING
Director of public relations at the FTC Douglas Farrar told, “We are watching recent events at Twitter with significant concern.”
“Companies are required to abide by our consent decrees, and no CEO or business is immune to the law. The updated consent order provides us with additional measures to monitor compliance, and we intend to employ them “This is what Farrar had to say.
In May, Twitter paid $150 million to resolve Federal Trade Commission (FTC) charges that it had improperly exploited users’ private information (such as phone numbers) to target advertising to them while assuring them that the information was being gathered only for security purposes.
On Thursday, Twitter’s privacy counsel indicated in an internal document that Spiro had said that Musk was prepared to take a “great amount of risk” with the firm. “Elon shoots rockets into space, he’s not frightened of the FTC,” Spiro was reported as saying by Elon’s lawyer.
Concerns have been raised that Musk, who has often intervened in political discussions, may be subject to pressure from governments attempting to regulate online expression as a result of Twitter’s takeover.
U.S. Vice President Joe Biden said on Wednesday that Musk’s “cooperation and/or technological partnerships with other nations is worthy of looking at.”
SPONSORS ARE UNCONFIDENT
On Wednesday, when addressing advertisers on Twitter’s Spaces feature, Musk said that he hoped to transform the social media site into a “force for truth” by eliminating bogus accounts.
It’s possible his promises won’t cut it.
The Mexican fast food chain Chipotle (CMG.N) said on Thursday that it has suspended all sponsored and owned content on Twitter “until we have a clearer grasp on the trajectory of the platform under its new leadership.”
Concerned that Musk would relax content moderation restrictions, it halted advertising on Twitter with other firms including General Motors (GM.N).
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