Twitter boss Elon Musk told employees at a recent all-hands meeting that the company is losing so much money that “ personal bankruptcy is not out of the question, ” according to The Information .
Twitter, which hasn’t flipped a profit since 2019, has seen a “ massive drop” in revenue according to Musk, as advertisers step back from spending campaigns.
Musk also suggested throughout the meeting that the company’s future depends on the success of the revamped $8 per month Twitter Blue subscription service – which is currently being bombarded by bots, con artists, and impersonators.
“ The reason we are going to going hardcore on subscribers is to keep Twitter with your life , ” Musk mentioned, according to The data , adding “ Without significant subscription income, there is a good chance Twitter will not survive the forthcoming economic downturn. “
Musk also declared that the company’s “ work from anywhere” policy is now terminated, telling Platformer “ If you can bodily make it to an office and you avoid show up, resignation accepted. ”
Banking institutions balking at holding debt?
As Bloomberg notes, Wall Street banks that lent Musk $13 billion to fund Musk’s acquistion have been silently approaching hedge funds to see if they would be thinking about chunks of buyout financial debt at deeply discounted prices as low as 60 pennies on the dollar – which would mark one of the greatest discounts in a decade.
The particular lukewarm investor reception shows just how big of the albatross the Twitter debt is becoming for a Morgan Stanley-led cohort that will committed to finance Musk’s acquisition of the social-media firm back in 04, before credit markets cratered. The seven banks are now saddled with risky loans that they never intended to keep on their books, and encounter an increasingly uphill battle to reduce losses. -Bloomberg
In particular, the banks want to unload their $6. 5 billion leveraged loan portion of the funding, and if the loans are usually trading at 60 pennies, that implies everything below the secured tranche in the cap structure is reduced (more or less a donut), and the EV to the company is around $8 billion dollars.
Meanwhile, the Federal Trade Fee has sounded the alarm over an exodus of top employees from the social media giant – the latest of whom was your company’s head of moderation and safety, Yoel Roth , who seem to – as a longstanding left-leaning executive, provided some level cover for Musk.
The government watchdog company said that it was “ tracking the developments at Twitter with deep concern, ” and that it’s considering taking action to ensure that the company is usually complying with a ‘ permission order’ which requires the company to comply with certain personal privacy and security requirements related to allegations of past data misuse.
Twitter was first place under a consent order in 2011, and it agreed to a new purchase earlier this year. If the FTC finds Twitter is not complying with this order, it could fine the company hundreds of millions of dollars, possibly damaging the company’s already dangerous financial state. -WaPo
“ No CEO or company is above the law, plus companies must follow our consent decrees, ” said FTC director of public affairs, Douglas Farrar. “ Our revised consent order gives us new tools to ensure compliance, and we are prepared to make use of them. ”
According to the report, FTC staffers stated they were the majority of concerned regarding the rapid rollout of new functions which have however to undergo full security testimonials governed by the FTC permission decree. The agency furthermore objected to Musk needing staff to work in the office at least 40 hours per week, effective Thursday.
Former FTC authorities warned that the departures of key personal privacy and security officials, along with some of Musk’s proposed modifications to Twitter products, opened the company to serious regulating peril . -WaPo
Workers were not happy in the company’s slack channel following the all-hands meeting.
“ What’s the motivation? Work hard or get fired? ” asked one employee.
“ How do you plan to restore totally destroyed trust? ” asked another.
“ I am ethically not okay with making the richest person on earth even richer. Also not okay with this alpha dog mentality – it’s already trickling down. ”