The drama at Twitter has not ceased to stop ever since it’s been acquired by Tesla Founder and CEO Elon Musk for $44 billion two weeks ago.
Now, according to a report from Platformer, Twitter’s new owner and CEO, Musk in an all-hands meeting on Thursday with all employees at Twitter revealed that there is a possibility that the social media platform could go bankrupt.
He said that he is not sure how much run rate the company has and that “bankruptcy isn’t out of the question.”
The announcement comes hours after Musk in his first company-wide email warned its employees that if the business did not generate considerable subscription revenue to compensate for the fading income from advertising, it would not be able to “survive the upcoming economic downturn”, three sources told Reuters.
“Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message. Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” Musk said.
He told employees that Twitter was losing more than $4 million a day, mainly because advertisers — its main source of revenue — have chosen to stay away since he took over, thereby reducing revenue.
Several advertisers have pulled back over concerns about Musk’s content moderation policies to advertisers. Some of the firms that have withdrawn ads include Audi, Chipotle, IPG, General Mills, and General Motors.
Musk also warned that the company did not have the necessary cash to survive, and may lose billions of dollars next year.
Following the takeover, several top executives have left Twitter including Yoel Roth, the company’s Head of Safety & Integrity, and Chief Security Officer Lea Kissner.
Roth in his Twitter profile on Thursday described himself as the “Former Head of Trust & Safety” at the company.
Kissner, too, tweeted on Thursday that she had quit the company.
I've made the hard decision to leave Twitter. I've had the opportunity to work with amazing people and I'm so proud of the privacy, security, and IT teams and the work we've done.
I'm looking forward to figuring out what's next, starting with my reviews for @USENIXSecurity ?
— Lea Kissner (@LeaKissner) November 10, 2022
Further, Chief Privacy Officer Damien Kieran and Chief Compliance Officer Marianne Fogarty have also resigned, according to an internal message posted to Twitter’s Slack messaging system on Thursday.
Robin Wheeler, the company’s top ad sales executive who connected Twitter to advertisers, was initially reported to have left the company. However, she later tweeted that she has not left Twitter.
“I’m still here,” Wheeler tweeted late on Thursday.
I'm still here.
— Robin Wheeler ? (@robinw) November 11, 2022
Twitter’s tryst with the U.S. regulator
The U.S. Federal Trade Commission (FTC) said it was keeping a watch on Twitter with “deep concern” after the social media platform’s three privacy and compliance officers quit, which has potentially put the company 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.
However, Twitter’s legal chief Alex Spiro revealed the team is having “a constructive ongoing dialogue” on the matter.
As of now, no official investigation has been announced by the FTC into Twitter’s recent changes.
In May, Twitter agreed to pay $150 million to settle allegations by the FTC for deceptively using non-public user contact information, like phone numbers, obtained for account security purposes to serve targeted ads to Twitter users.
In the internal note mentioned above, the attorney said hearing Spiro says that Musk was willing to take a “huge amount of risk” with Twitter.
“Elon puts rockets into space, he’s not afraid of the FTC,” the attorney quoted Spiro as saying.
Twitter has not yet officially commented either on the news of potential bankruptcy, the departures of its top executives, or the FTC warning. Stay tuned for more updates!