Musk Warns Twitter Bankruptcy Possible

Elon Musk, in his first address to Twitter employees since purchasing the company, said that bankruptcy was a possibility if the company doesn’t start generating more cash, US media reported.

Two weeks after he purchased the company for $44 billion, Musk has fired half of Twitter’s staff, ushered out most of the top executives and ordered the remaining employees to stop working from home.

While the buyout has removed Twitter from the scrutiny of public markets, Musk loaded the company with almost $13 billion of debt that’s now in the hands of seven Wall Street banks that have been unable to offload it to investors.

Confidence in the company has eroded so rapidly that, even before Musk’s bankruptcy comments, some funds were offering to buy the loans for as little as 60 cents on the dollar — a price typically reserved for companies deemed in financial distress.

In his address to staff, Musk issued multiple dour warnings. Employees should brace for 80-hour work weeks. There will be fewer office perks like free food. And he ended the pandemic-era flexibility that allowed employees to work from home.

In discussing Twitter’s finances and future, Musk said the company needed to move with urgency to make its $8 subscription product, Twitter Blue, something users will want to pay for, given a pullback by advertisers who are concerned about harmful content.

He also hinted at products he’d like to introduce, including payments, ads that are more conversational and interest-bearing checking accounts.

Onboarding to the Twitter app should be smoother, as is the case with TikTok, he said.

On Thursday, Twitter’s chief information security officer, chief privacy officer and chief compliance officer departed, raising concerns about the company’s ability to keep its platform secure and comply with regulations.

Twitter is currently bound by a consent decree with the Federal Trade Commission that regulates how the company handles user data, and could be subject to fines for violations.