Musk warns Twitter will go bankrupt if more executives resign

Nov 10 (Reuters) – Twitter Inc’s new owner Elon Musk raised the possibility of bankruptcy for the social media platform on Thursday, ending a chaotic day that included warnings from U.S. privacy regulators and the company’s Exit of trust and safety leaders.

The billionaire said on his first group call with employees that he couldn’t rule out bankruptcy and bought the company two weeks later for $44 billion — credit experts say, according to Bloomberg. The deal puts Twitter’s finances in jeopardy.

Earlier in the day, Musk warned in his first company-wide email that Twitter won’t be able to “survive the coming recession if it doesn’t increase subscription revenue to offset declining ad revenue.” ‘, three people who saw the news told Reuters.

Yoel Roth, who oversees Twitter’s response to combating hate speech, misinformation and spam, resigned on Thursday, two people familiar with the matter told Reuters.

In a Twitter profile on Thursday, Ross described himself as the company’s “former head of trust and safety.”

Ross did not respond to a request for comment. His exit was first reported by Bloomberg and tech site Platformer.

Earlier Thursday, Twitter’s chief information security officer Lea Kissner tweeted that she had resigned.

Chief privacy officer Damien Kieran and chief compliance officer Marianne Fogarty also resigned, according to an internal message posted Thursday on Twitter’s Slack messaging system by a lawyer with Twitter’s privacy team.

Robin Wheeler, the company’s top ad sales executive, told employees in a memo that she would stay at the company, a change that a person who saw the news said was in contrast to previous media reports that she would also be leaving. statement is different.

“I’m still here,” Wheeler tweeted late Thursday.

The FTC said it was “deeply following” Twitter after three privacy and compliance officials resigned. The resignations could put Twitter at risk of violating regulatory orders.

Musk’s attorney, Alex Spiro, told some employees in an email late Thursday that Twitter would continue to comply.

“We spoke with the FTC today about our continuing obligations and have had a constructive and ongoing conversation,” Spiro wrote.

He said only Twitter, not individual employees, could be held responsible for the orders.

“I know some Twitter employees who don’t even get involved with the FTC, commenting that if we don’t follow the rules, they could[go to]jail – which is simply not the case,” he wrote.

In this illustration taken on July 13, 2021, the Twitter app is seen on a smartphone. REUTERS/Dado Ruvic/Illustration//File Photo

In his first meeting with many employees on Twitter on Thursday afternoon, Musk warned that the company could lose billions of dollars next year, The Information reported.

In an email to employees, Musk added that remote work will no longer be allowed, and they are expected to be in the office for at least 40 hours a week.

Twitter, Musk and Spiro did not respond to requests for comment on the potential bankruptcy, the FTC warning or the departure.

Musk relentlessly moved to clean after taking office in October. 27, and said the company was losing more than $4 million a day, mainly because advertisers started fleeing after he took over.

After the deal, Twitter has $13 billion in debt and faces interest payments totaling nearly $1.2 billion over the next 12 months. The sum exceeds Twitter’s recently disclosed cash flow, which stood at $1.1 billion at the end of June.

Musk has started charging $8 a month for the Twitter Blue service, which includes blue check verification.


“We’re closely monitoring Twitter for updates,” Douglas Farrar, the FTC’s head of public affairs, told Reuters.

“No CEO or company is above the law, and companies must comply with our consent decrees. Our revised consent decrees give us new tools to ensure compliance, and we’re ready to use them,” Farrar said.

In May, Twitter agreed to pay $150 million to settle FTC allegations that it misused private information, such as phone numbers, to serve ads to users after telling users it was collected for security reasons.

Spiro had said Musk was willing to take “substantial risks” for the company, Twitter’s privacy lawyer said in an internal memo on Thursday. “Elon sent a rocket into space, and he wasn’t afraid of the FTC,” Spiro was quoted as saying by the lawyer.

The Twitter acquisition has sparked concerns that Musk, who is often embroiled in political debate, could face pressure from countries trying to control speech online.

That prompted U.S. President Joe Biden to say Wednesday that Musk’s “cooperative and/or technological relationships with other countries are cause for concern.”

Advertisers are concerned

Musk told advertisers on Twitter’s Spaces feature Wednesday that his goal is to turn the platform into a force of truth and stop fake accounts.

His assurances may not be enough.

Chipotle Mexican Grill (CMG.N) said on Thursday it had withdrawn its paid and owned content on Twitter “while we have a better understanding of where the platform is headed under new leadership.”

Since Musk took office, other brands, including General Motors (GM.N ), have suspended advertising on Twitter, fearing he would loosen content moderation rules.

Reporting by Katie Paul in Palo Alto, Calif. and Paresh Dave in Oakland, Calif.; Additional reporting by Jeffrey Dastin in Palo Alto, Diane Bartz in Washington, Yuvraj Malik in Bengaluru and Fanny Potkin and Hyunjoo Jin; Writing by Sayantani Ghosh ; Edited by Shounak Dasgupta, Bill Berkrot, Deepa Babington and Sam Holmes

Our Standard: The Thomson Reuters Trust Principles.

Paresh Dave

Thomson Reuters

Tech reporters in the San Francisco Bay Area cover Google and other Alphabet Inc. companies. After four years at the Los Angeles Times, he joined Reuters in 2017 to focus on the local tech industry.

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