Elon Musk forewarned Twitter’s staff on Thursday during his first meeting with all of them that the firm could suffer a billion-dollar loss in 2019.
Los Angeles: Elon Musk, the company’s new owner, said that Twitter might go bankrupt on Thursday, capping a hectic day that also saw top executives who were expected to become future leaders leave the company and receive a warning from a US regulator.
According to credit experts, the billionaire informed Twitter personnel on a call two weeks after buying it for $44 billion that he couldn’t rule out bankruptcy. The deal endangered Twitter’s financial stability.
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.
Schott and Wheeler didn’t initially respond to requests for information. 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.
According to an official letter posted on Thursday to Twitter’s Slack chat system and obtained by Reuters, Twitter’s top privacy officer Damien Kieran and chief legal advisor Marianne Fogarty both offered their resignation letter.
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.
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 harmful content in search results than there were prior 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 distributions exceed Twitter’s most recent cash flow declaration, which showed that the company had $1.1 billion in cash as of the end of June.
Musk committed to remove bogus accounts last week, revealed plans to cut the company’s personnel in half, and unveiled plans to charge $8 per month for the Twitter Blue service, which will feature a blue check verification. According to the FTC’s director of public affairs, Douglas Farrar, “We are closely monitoring recent developments at Twitter with serious worry.”
The updated consent order gives us new powers to guarantee compliance, and we are ready to utilize them, according to Farrar. No CEO or organization is immune from the law, and businesses are required to follow our court decisions, said Farrar.
In May, Twitter agreed to pay $150 million to resolve FTC claims that it used users’ private information, such as phone numbers, for advertising purposes despite telling them the data was only gathered for security.
The lawyer mentioned hearing Twitter’s general counsel Alex Spiro say that Musk was willing to take a “huge amount of risk” with Twitter in the internal note referred to above.
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.
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.