Musk Warns Of Twitter Bankruptcy
Among the many options new Twitter owner Elon Musk is currently floating for the company is that of bankruptcy.
Musk raised the possibility during a call with employees, after a slew of executives quit, including Chief Security Officer Lea Kissner, Chief Privacy Officer Damien Kieran and Chief Compliance Officer Marianne Fogarty.
Musk warned the company was bracing to lose billions of dollars next year, despite the major cost cutting already in place.
Since taking over Twitter, Musk estimates the company is losing US$4 million a day, due mainly to fleeing advertisers.
He has burdened the company with US$13 billion in debt, the interest payments for which — at $1.2 billion over the next twelve months — are more than Twitter’s US$1.1 billion cash flow as of the end of June.
Over the weekend, he sacked 440,000 contract workers, following the previous cull of 3,700 employees.
Not surprisingly, all this quick action has the Federal Trade Commission paying attention.
“We are tracking recent developments at Twitter with deep concern,” Douglas Farrar, the FTC’s director of public affairs, told Reuters.
“No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”
Maybe bankruptcy isn’t the worst option.