Tech companies face massive financial problems |
Musk does not rule out Twitter bankruptcy
Since Elon Musk (51) bought Twitter, there has been bad news about the tech company almost every day. Now the new boss even fears that the social media service could go bankrupt in the coming year!
According to media reports, during an appearance in front of employees on Thursday, he warned that Twitter’s balance sheet could face a billion-dollar gap in the coming year. If, under these circumstances, it is not possible to bring in more money than we spend, “insolvency cannot be ruled out”, Musk quoted the financial service Bloomberg as well as the tech media “The Information” and “Platformer”. A statement from the Tesla boss himself was initially not available.
Even before Musk’s 44 billion takeover, Twitter was recently in the red. After the deal, Musk lamented a slump in sales because some major advertisers suspended ads on the platform. They worry that if Musk relaxes the content rules, as announced, their ads could appear alongside offensive tweets.
The tech company also has a loan of around $13 billion that Musk took out for the purchase. According to media reports, servicing this debt costs around one billion dollars a year. The tech billionaire wants to supplement the advertising revenue, which has so far accounted for 90 percent of revenue, with a subscription business. The launch of his new subscription with a verification check mark initially caused chaos because some users imitated celebrities and companies with fake accounts.
Before announcing a possible bankruptcy, Musk had already warned employees of difficult times in an email. The economic situation is “bad”, especially for a company that depends on advertising revenue.
In the memo, from which the US media unanimously quoted, Musk also announced new guidelines for working from home – in the future, working from home will only be permitted with his express personal permission. Employees must be in the office at least 40 hours per week. Before the takeover, Twitter’s employees were allowed to work from anywhere.
Last week, Musk cut around half of the approximately 7,500 jobs on Twitter. According to the reports, he now said that the company still had too many employees in some cases.
On Thursday, two other key executives left the company: Yoel Roth, who was responsible for filtering out objectionable content, and Robin Wheeler, who was recently in charge of advertiser relations.