New Twitter owner and CEO Elon Musk says that there’s a chance the social network could go bankrupt if it doesn’t sort out its financial issues soon.
The bombshell came in an email to employees in which he said that “bankruptcy isn’t out of the question” when discussing the need for an infusion of cash.
Musk has also had to backpedal on his updated Twitter Blue plans, removing it from sale despite the need for cash at a time when advertisers are becoming concerned about Musk’s leadership.
$44 billion down the drain?
Musk’s email to staff was reported on by Platformer (opens in new tab), with the CEO also telling workers that they must return to the office rather than work from home, too.
Twitter’s need to balance the books isn’t a huge surprise given Musk’s recent moves. He fired half of the company following claims that it was losing $4 million per day. He later had to ask some people to come back after it transpired that they were needed.
Musk had also rolled out an updated Twitter Blue program that cost $7.99 per month. He told employees that Twitter needs around half of its revenue to come from subscriptions in order to be sustainable and survive the global economic downturn. However, ad revenue is likely to stall with some companies reconsidering putting their ads on the platform.
The updated Twitter Blue allowed anyone to pay and receive a verified checkmark, causing many instances of impersonation of businesses across the social network. That put Musk’s need for subscription revenue at odds with his desire for ad companies to pay up — ad companies don’t want ads alongside tweets from fake companies for obvious reasons.
However, there are initial signs that it’s the ad companies that are winning out. The Verge (opens in new tab) reports that Twitter users can no longer sign up to become Twitter Blue members. In addition, some accounts with the blue checkmark have already had it removed, suggesting Twitter is in the middle of rolling back the damage Twitter Blue has already caused.
Whether or not Twitter going bankrupt is a real possibility or if Musk is being economical with the truth remains to be seen. But reports that the company is on a collision course with the FTC that could result in billions of dollars in fines won’t help matters.