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Elon Musk Says Twitter May Face Bankruptcy As Key Executives Resign

Elon Musk's ownership of Twitter descended ever deeper into chaos on Thursday as key security executives resigned from the platform, drawing a sharp warning from US regulators.


The Twitter logo is seen on the exterior of Twitter headquarters in San Francisco, California, on October 28, 2022. – After months of controversy, Elon Musk is now at the head of one of the most influential social networks on the planet, whose “tremendous potential” he has promised to unleash. (Photo by Constanza HEVIA / AFP)
The Twitter sign is seen at their headquarters on October 28, 2022, in San Francisco, California. (Photo by Constanza HEVIA / AFP)

 

Elon Musk says Twitter may face bankruptcy as key security executives resigned from the platform, drawing a sharp warning from US regulators.

The walkouts came a day after the turbulent launch of new features introduced by Tesla and SpaceX owner Musk following his $44 billion buyout of the influential messaging app.

Musk on Thursday warned employees that the site was burning dangerously through cash, raising the specter of bankruptcy if the situation was not turned around.

“I’ve made the hard decision to leave Twitter,” tweeted chief security officer Lea Kissner, who reportedly stepped down with other key privacy or security executives.

In the most extraordinary exit, US media reported that Yoel Roth, the site’s head of trust and safety stepped down just a day after staunchly defending Musk’s content moderation policy to advertisers.

The convulsions followed the unveiling of the site’s long-awaited Twitter Blue subscription service, which allows users to pay $7.99 per month for a coveted blue tick, as well as a separate gray “official” badge for some high-profile accounts.

But the release descended into tumult on Wednesday when Musk scrapped the new gray label almost immediately, overshadowing the launch of the pay service, which is currently only available on the mobile app on iPhones and in the United States.

The launch also saw the emergence of a flurry of fake accounts as users used the opportunity to impersonate celebrities and politicians such as NBA star LeBron James or former British prime minister Tony Blair.

Early media reports also said Robin Wheeler, who held a key role linking Twitter with advertisers and was considered a key Musk ally inside the company, was leaving but late Thursday she tweeted: “I’m still here.”

READ ALSOMusk ‘Kills’ New Twitter Label Hours After Launch

 ‘Deep Concern’

Elon Musk and a Twitter illustration

 

The chaos drew a rare warning from the Federal Trade Commission, the US authority that oversees consumer safety which had put Twitter under watch for past security and privacy breaches.

“We are tracking recent developments at Twitter with deep concern,” a spokesperson for the FTC said in a statement.

“No CEO or company is above the law, and companies must follow our consent decrees,” the spokesperson added, referring to past commitments by Twitter to obey US privacy rules.

Violating FTC decisions could cost Twitter millions of dollars in fines.

The 51-year-old entrepreneur fired half of the 7,500 employees of the California company a week ago, 10 days after buying the site and becoming its sole owner.

For the first time since the layoffs, Musk on Thursday addressed his remaining employees and urged them to help the site reach one billion users, according to employee text messages seen by AFP.

Musk also warned that the company was bleeding cash and expressed fear about the effects of the poor economy on his newly bought business.

“You may have noticed I sold a bunch of Tesla stock. The reason I did that is to save Twitter,” he is reported to have said.

Wedbush analyst Dan Ives meanwhile warned that the Twitter episode could have serious repercussions for electric car manufacturer Tesla.

“Brand destruction is our biggest worry with this Twitter circus show. It’s that simple and I can’t ignore it for Tesla stock,” Ives wrote on the site.

Twitter is also crippled by the decision of advertisers to stay away from the platform, concerned about Musk’s plans.

The tycoon announced he was ending work-from-home policies at Twitter, which had been a widespread practice at the San Francisco-based company.

“If you don’t show up at the office, resignation accepted,” he told employees.

AFP