Twitter boss Elon Musk told employees at a recent all-hands meeting that the company is losing so much money that “bankruptcy is not out of the question,” according to The Information.
Twitter, which hasn’t turned a profit since 2019, has seen a “massive drop” in revenue according to Musk, as advertisers step back from spending campaigns.
Musk also suggested during the meeting that the company’s future depends on the success of the revamped $8 per month Twitter Blue subscription service – which is currently being bombarded by bots, scammers, and impersonators.
The reason we’re going hardcore on subscribers is to keep Twitter alive,” Musk said, according to The Information, adding “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn.”
Musk also announced that the company’s “work from anywhere” policy is now canceled, telling Platformer “If you can physically make it to an office and you don’t show up, resignation accepted.”
Banks balking at holding debt?
As Bloomberg notes, Wall Street banks that lent Musk $13 billion to fund Musk’s buyout have been quietly approaching hedge funds to see if they would be interested in chunks of buyout debt at deeply discounted prices as low as 60 cents on the dollar – which would mark one of the deepest discounts in a decade.
The lukewarm investor reception shows just how big of an albatross the Twitter debt is becoming for a Morgan Stanley-led cohort that committed to finance Musk’s acquisition of the social-media firm back in April, before credit markets cratered. The seven banks are now saddled with risky loans that they never intended to keep on their books, and face an increasingly uphill battle to minimize losses. -Bloomberg
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