Musk tells of risk of Twitter bankruptcy as tweeters trash brands
Alleged genius behind electric car spots one thing that might save company from the abyss: ending WFH
Comment Twitter CEO Elon Musk has told employees of the risk of short-term bankruptcy as corporations — hence potential advertisers — get trashed by spoof accounts set up under the new blue checkmark scheme he introduced.
According to numerous reports, including Bloomberg, the rocket and electric car tycoon took to a Twitter all-company meeting to tell them there was a risk of going bust if the company did not start to generate more cash.
Just two weeks after he took the 16-year-old micro-blogging platform private for $44 billion – using loans with a $1-billion-a-year interest fee – Musk also said staff should brace for 80-hour work weeks, do without company-provided food and get used to working from the office.
"If you don't want to come, resignation accepted," he said, according to the report.
"We all need to be more hardcore," he apparently said in response to a question about the prospect of staff just… leaving.
Hardcore or not, a pattern has already been set by senior company figures. Yesterday, the company's chief information security officer used the platform to publicly quit their role.
Chief privacy officer Damien Kieran and chief compliance officer Marianne Fogarty soon followed, according to reports.
The latter departure prompted the US Federal Trade Commission to issue a warning saying it was "tracking the developments at Twitter with deep concern."
Musk plans to help Twitter escape the gravitational pull of its cashflow blackhole with the introduction of a new blue checkmark scheme, under which anyone could pay $8 for the sought-after icon without ID verification. It replaces what he calls a legacy scheme, a way users used to be able to have their identity verified for free.
But the move threatens to cut off that other ad revenue — that other vital source of cash — as users used the new blue checkmark scheme to launch spoof accounts to parody, abuse or score political points against prominent brands and individuals.
Adding to former US president George Bush, former UK prime minister Tony Blair, and Nintendo's Mario, are Lockheed Martin, doll brand American Girl, games platform Roblox, oil conglomerate BP, and pharma giant Eli Lilly, who all became targets today, as you can see in one helpful Twitter thread.
Quite what advertisers and potential ad buyers might think of having their brands trashed on the platform remains to be seen, but Unilever, Coca-Cola and more were advised to pause their Twitter ad spending.
Some have done so though a spokesperson for Unilever, at least, told us it has not suspended its advertising.
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As news outlet Quartz points out, Twitter generated 92 percent of its revenue from advertising in the first half of 2022. Musk's response to the ad-buyers' exodus has been to insult them, saying they don't support "free speech," and even threatening to publicly "name and shame" them. All this to an audience which has the whole internet, TV, radio and film through which it can reach a target audience.
Musk took Twitter private, avoiding the requirement for market scrutiny, and burdening it with $13 billion in debt. Now reports suggest banks are selling that on for 60 cents on the dollar, a red flag usually reserved for companies struggling with financial distress.
The billionaire previously claimed Twitter is losing $4 million a day. We note that Twitter made a $513 million profit in the first quarter of 2022, largely from the sale of MoPub, and a $270 million loss in the second quarter, finishing that period with $2.68 billion in cash equivalents.
Maybe Twitter's new subscription schemes will be a wild success, bringing in potentially tens of millions of dollars to a business that was doing $5 billion a year in ad revenue. If this is what genius looks like, we’d hate to see what a dumb person would do. ®
Editor's note: This article was updated to clarify that Unilever says it has not suspended its Twitter advertising.