Musk warns Twitter will go bankrupt if more executives resign

Nov 10 (Reuters) – Twitter’s new owner Elon Musk on Thursday raised the possibility of the social media platform going bankrupt, ending a chaotic day that included warnings from U.S. regulators and what was seen as a future leader the departure of senior managers of people.

According to Bloomberg, the billionaire told Twitter employees on a phone call two weeks after the $44 billion acquisition of Twitter that he couldn’t rule out bankruptcy — a deal credit experts say leaves Twitter’s finances in jeopardy.

Two executives – Yoel Roth and Robin Wheeler – who moderated a Twitter Spaces chat with Musk on Wednesday in an attempt to allay advertisers’ concerns have resigned, a person familiar with the matter told Reuters.

Ross and Wheeler did not immediately respond to requests for comment. The exits were first reported by Bloomberg and tech site Platformer.

Earlier Thursday, Twitter’s chief 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.

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

Musk warned at Twitter’s first meeting with all employees on Thursday afternoon that the company could lose billions of dollars next year, The Information reported.

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

After Musk took over, Wheeler was the face of Twitter advertising. Ross, who previously served as Twitter’s head of security and integrity, said Twitter has reduced views of harmful content in search results by 95 percent compared to before Musk’s acquisition.

Musk moved relentlessly to clean up after his Oct. 4 acquisition of Twitter for $44 billion. On the 27th, Zeng said the company was losing more than $4 million a day, mainly because advertisers began to flee after he took over.

Musk owes Twitter $13 billion in debt and will face 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 announced plans to cut half of his workforce last week, pledged to stop fake accounts and charge $8 a month for Twitter Blue, 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.

In the internal note cited above, the lawyer mentioned hearing Twitter’s legal director, Alex Spiro, say Musk was willing to take “enormous risks” on Twitter. “Elon sent a rocket into space, and he wasn’t afraid of the FTC,” Spiro was quoted as saying by the lawyer.

Twitter did not respond to a request for comment on the attorney’s or the departure’s account. Spiro did not immediately respond to a request for comment.

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.

Musk sent his first email to Twitter employees on Thursday saying remote work would no longer be allowed, and they were expected to be in the office for at least 40 hours a week, Bloomberg reported.

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, and Yuvraj Malik in Bengaluru; Writing by Sayantani Ghosh; Writing by Arun Koyyur, Shounak Edited by Dasgupta, Bill Berkrot and Deepa Babington

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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