Friday, November 11, 2022 – Twitter’s new owner, Elon Musk has raised the possibility of the social media platform going bankrupt.
Bloomberg News reports that the world’s richest man on his
first mass call with employees said that he could not rule out bankruptcy, two
weeks after buying it for $44 billion – a deal that has left Twitter’s finances
in a hard position.
In his first email to all Twitter staff, Musk warned that
Twitter would not be able to “survive the upcoming economic downturn” if it
fails to boost subscription revenue to offset falling advertising income.
The mail comes after Yoel Roth, who the head of Twitter’s
response to combat hate speech, misinformation and spam, resigned on Thursday,
whileTwitter’s Chief Information Security Officer Lea Kissner tweeted that she
had quit.
Also, the company’s Chief Privacy Officer Damien Kieran and
Chief Compliance Officer Marianne Fogarty also resigned, according to an
internal message posted to Twitter’s Slack messaging system on Thursday by an
attorney on its privacy team.
Following the mass resignations, the U.S. Federal Trade
Commission said it was watching Twitter with “deep concern” after the three
privacy and compliance officers quit.
The resignations put Twitter at risk of violating regulatory
orders.
We are tracking recent developments at Twitter with deep
concern,” Douglas Farrar, the FTC’s director of public affairs, 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 said.
Reacting to possibility of being fined by the US Federal
Trade Commission Musk attorney Alex Spiro told some employees in an email late
on Thursday that Twitter would remain in compliance.
“We spoke to the FTC today about our continuing obligations
and have a constructive ongoing dialogue,” Spiro wrote.
He stated that only Twitter, not individual employees, could
be held liable against the orders.
“I understand that there have been employees at Twitter who
do not even work on the FTC matter commenting that they could (go) to jail if
we were not in compliance – that is simply not how this works,” he wrote.
Musk ruthlessly moved layoff staff after taking over on Oct.
27 and has said the company was losing more than $4 million a day, largely because
advertisers started fleeing once he took over.
Twitter has $13 billion in debt after the deal and faces
interest payments totaling close to $1.2 billion in the next 12 months. The
payments exceed Twitter’s most recently disclosed cash flow, which amounted to
$1.1 billion as of the end of June.
Musk has also begun charging $8 a month for the Twitter Blue
service that will include a blue check verification.
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