Musk warns Twitter will go bankrupt if more top executives quit

November 10 (Reuters) – New owner of Twitter Inc, Elon Musk, on Thursday raised the possibility of the social media platform going bankrupt, capping a chaotic day that included a warning from a U.S. privacy regulator and the exit from the leader in enterprise trust and security.

The billionaire in his first mass call with employees said he couldn’t rule out bankruptcy, Bloomberg News reported, two weeks after buying it for $44 billion – a deal that industry experts say credit, has left Twitter’s finances in a precarious position.

Earlier today, in his first company-wide email, Musk warned that Twitter wouldn’t be able to “survive the coming economic downturn” if it failed to grow revenue. subscription fee to offset lower ad revenue, said three people who saw the post. Reuters.

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

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

Roth did not respond to requests for comment. Bloomberg and technology site Platformer reported its release first.

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 have also resigned, according to an internal message posted on Twitter’s Slack messaging system on Thursday by a lawyer on its privacy team and seen by Reuters.

Robin Wheeler, the company’s top ad sales manager, told employees in a memo that she was staying with the company, a person who saw the post said, departing from media reports. precedents that she too would leave.

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

The US Federal Trade Commission said it was monitoring Twitter with “deep concern” following the departure of the three privacy and compliance officers. These resignations potentially put Twitter at risk of violating regulatory orders.

Musk’s attorney, Alex Spiro, told some employees in an email late Thursday that Twitter would remain in compliance.

“We spoke to the FTC today about our ongoing obligations and have a constructive ongoing dialogue,” Spiro wrote.

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

“I understand that there have been Twitter employees who aren’t even working on the FTC case who have said they could (go) to jail if we’re not in compliance – that’s just not not how it works,” he wrote.

The Twitter application is seen on a smartphone in this illustration taken July 13, 2021. REUTERS/Dado Ruvic/Illustration//File Photo

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

Musk added in the email to workers that remote work would no longer be allowed and that they would be expected in the office for at least 40 hours a week.

Twitter, Musk and Spiro did not respond to requests for comment on a possible bankruptcy, the FTC warning or the departures.

Musk ruthlessly moved to clean the house after taking over on October 1. 27 and said the company was losing more than $4 million a day, largely because advertisers started fleeing once he took over.

Twitter is $13 billion in debt after the deal and will have to pay interest totaling nearly $1.2 billion over the next 12 months. The payouts exceed Twitter’s most recently disclosed cash flow, which stood at $1.1 billion at the end of June.

Musk has started charging $8 per month for the Twitter Blue service which will include blue check verification.

WARNING

“We are following recent developments on Twitter with deep concern,” Douglas Farrar, director of public affairs at the FTC, told Reuters.

“No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent decree gives us new tools to ensure compliance, and we are ready to use them,” said said Farrar.

In May, Twitter agreed to pay $150 million to settle FTC allegations that it misused private information, such as phone numbers, to target advertising to users after telling them the information had only been collected for security reasons.

Twitter’s privacy attorney mentioned in the internal memo on Thursday that Spiro said Musk was willing to take “an enormous amount of risk” with the company. “Elon puts rockets in space, he’s not afraid of the FTC,” the attorney quoted Spiro as saying.

The Twitter takeover has raised concerns that Musk, who has often waded into political debates, could face pressure from countries trying to control online speech.

That prompted US President Joe Biden to say on Wednesday that “Musk’s cooperation and/or technical relationships with other countries are worth considering.”

ADVERTISERS NOT REASSURED

Musk told advertisers on Wednesday, speaking on Twitter’s Spaces feature, that he aimed to turn the platform into a force for truth and stop fake accounts.

His assurances may not be enough.

Chipotle Mexican Grill (CMG.N) said on Thursday that it has removed its paid and owned content on Twitter “while we better understand the direction of the platform under its new leadership.”

He joined other brands including General Motors which have suspended advertising on Twitter since Musk took over, fearing he would relax 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; Written by Sayantani Ghosh; Editing by Shounak Dasgupta, Bill Berkrot, Deepa Babington and Sam Holmes

Our standards: The Thomson Reuters Trust Principles.

Paresh Dave

Thomson Reuters

San Francisco Bay Area-based technology journalist covering Google and the rest of Alphabet Inc. Joined Reuters in 2017 after four years at the Los Angeles Times focusing on the local tech industry.

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