New Twitter owner and CEO Elon Musk says that there's a chance the social network could go bankrupt if it doesn't sort out its financial issues soon.
The bombshell came in an email to employees in which he said that “bankruptcy isn’t out of the question" when discussing the need for an infusion of cash.
Musk has also had to backpedal on his updated Twitter Blue plans, removing it from sale despite the need for cash at a time when advertisers are becoming concerned about Musk's leadership.
$44 billion down the drain?
Musk's email to staff was reported on by Platformer, with the CEO also telling workers that they must return to the office rather than work from home, too.
Twitter's need to balance the books isn't a huge surprise given Musk's recent moves. He fired half of the company following claims that it was losing $4 million per day. He later had to ask some people to come back after it transpired that they were needed.
Musk had also rolled out an updated Twitter Blue program that cost $7.99 per month. He told employees that Twitter needs around half of its revenue to come from subscriptions in order to be sustainable and survive the global economic downturn. However, ad revenue is likely to stall with some companies reconsidering putting their ads on the platform.
The updated Twitter Blue allowed anyone to pay and receive a verified checkmark, causing many instances of impersonation of businesses across the social network. That put Musk's need for subscription revenue at odds with his desire for ad companies to pay up — ad companies don't want ads alongside tweets from fake companies for obvious reasons.
However, there are initial signs that it's the ad companies that are winning out. The Verge reports that Twitter users can no longer sign up to become Twitter Blue members. In addition, some accounts with the blue checkmark have already had it removed, suggesting Twitter is in the middle of rolling back the damage Twitter Blue has already caused.
Whether or not Twitter going bankrupt is a real possibility or if Musk is being economical with the truth remains to be seen. But reports that the company is on a collision course with the FTC that could result in billions of dollars in fines won't help matters.
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Oliver Haslam has written about Apple and the wider technology business for more than a decade with bylines on How-To Geek, PC Mag, iDownloadBlog, and many more. He has also been published in print for Macworld, including cover stories. At iMore, Oliver is involved in daily news coverage and, not being short of opinions, has been known to 'explain' those thoughts in more detail, too.
Having grown up using PCs and spending far too much money on graphics card and flashy RAM, Oliver switched to the Mac with a G5 iMac and hasn't looked back. Since then he's seen the growth of the smartphone world, backed by iPhone, and new product categories come and go. Current expertise includes iOS, macOS, streaming services, and pretty much anything that has a battery or plugs into a wall. Oliver also covers mobile gaming for iMore, with Apple Arcade a particular focus. He's been gaming since the Atari 2600 days and still struggles to comprehend the fact he can play console quality titles on his pocket computer.