news hardware Angry Elon Musk fears bankruptcy of Twitter
The Twitter x Elon Musk soap opera continues and the worries haven’t stopped since the takeover! Worse still, advertisers have been fleeing the platform since the arrival of the businessman, not upset by this drop in income.
Elon Musk and Twitter, a long-term affair
Sometimes it feels like our life is a movie. Others say it is a long, calm river. But in the case of Elon Musk, we could all grab some popcorn and sit quietly watching all the ups and downs that seem to be happening with him. And above all, we would get our money’s worth, because every day has its share of consequences to see.
The Twitter arc has now taken it to the next level: while everything seemed up in the air, Twitter has finally been bought out for the sum promised and it’s time for a change at the blue bird. Except that not everything goes according to plan and Elon lost a lot of money in this deal which cost him way more than he thought he would.
A little reminder of the facts of this year 2022:
- In January, Elon Musk starts buying shares en masse. The price is then around $38.
- In April, he owned 9% of the company, or nearly $2.6 billion, and announced he wanted to take control.
- A few days later, he announced a takeover bid at $53.50 per share for a total of $44 billion. The stock price then rises to $50 per share.
- In May, Musk changed his mind and wanted to back out of the deal (which was eventually accepted by Twitter). In his opinion, the many bot accounts are to blame.
- The case comes to court because Twitter wants to enforce its commitment to Musk. The problem for the latter is that he could well lose the case, the American judiciary could easily assume he wanted to illegally manipulate the market to sell his more expensive stocks.
- In October, Musk changes his mind again and finally accepts the deal! Twitter is eventually bought out, but the billionaire had to go into debt to do it.
So we have a debt-ridden Musk coming into the company and making “small” changes. But things don’t go the way he wanted…
Twitter saw a massive drop in revenue as activist groups pressured advertisers, although content moderation has not changed and we have done everything we can to appease activists.
Extremely messed up! They’re trying to destroy freedom of speech in America.
— Elon Musk (@elonmusk) November 4, 2022
Paid certification, advertiser withdrawal, massive drop in income, massive layoffs… Twitter is in bad shape and Elon Musk is pissed!
Who knew acquiring a loss-making $44 billion company could be a problem? Especially since the entrepreneur managed to scare off a large number of advertisers with his first decisions, thereby evading the company a lot of money.
One of those decisions was laying off 50% of the Twitter workforce. At the forefront of marketing, design and management. The moderation was also affected with 15% fewer staff. Even outstanding elements such as Frenchman Emmanuel Cornet, who spoke at the Libération and was among the top 5 to 10% of the company’s engineers, according to the lists made this week, were not kept.
Yesterday was my last day on Twitter: the entire human rights team was fired from the company.
I am very proud of the work we have done to implement the UN Guiding Principles on Business and Human Rights to protect those vulnerable in global conflicts and crises, including Ethiopia,
— Shannon Raj Singh (@ShannonRSingh) November 4, 2022
Hundreds of employees learned they lost their jobs because they couldn’t log in. In exchange for this forced emigration, the company gave them three months of allowances, more than is mandatory in the United States. To explain these layoffs, Musk explained that Twitter is currently losing $4 million a day. However, legal questions are looming and some of the former employees are said to be preparing to go to court, sources say Musk has failed to comply with US laws that require 60 days’ notice of mass layoffs
Unfortunately, in terms of reducing Twitter’s power, there is no choice when the company is losing over $4 million a day.
All those who left were offered 3 months’ severance pay, which is 50% more than required by law.
— Elon Musk (@elonmusk) November 4, 2022
On the one hand, Elon Musk announced in a Ted conference that he did not want to buy the company for economic reasons, but to promote freedom of expression. In a tweet aimed at the platform’s advertisers, he even talks about moving humanity forward!
On the other hand, he decides to subscribe to be able to regain the famous certification which until then (to a certain extent) made it possible to recognize and identify the accounts of official figures and thus give more weight to their voice without being able to usurp their identity. If you want to keep your certification, you have to pay and anyone can access it.
However, there are many problems that can arise both in the idea and in the implementation. Identity theft can therefore take place without hesitation. Government administrations could also be affected and cause serious problems if these accounts are not closely monitored!
Additionally, Musk recently announced that if you don’t pay the $8 a month, you’ll be severely penalized by the algorithm. And that’s pretty tough considering it takes a lot of scrolling through your Twitter feed to see posts from unverified people. If you don’t pay, you’re in the same box as bots and trolls (who of course can pay to keep quiet).
If you don’t pay the $8, an algorithm will suppress your tweets. Since he didn’t make that shit up, he said it to a room of investors yesterday, claiming it would solve hate speech. “You have to scroll very far to see unverified users.” pic.twitter.com/gSzXtzFYtC
— Aaron Stewart-Ahn (@somebadideas) November 5, 2022
But the problem doesn’t end there. Elon Musk’s libertarian will terrified advertisers, who by then accounted for 90% of the platform’s advertising revenue. American agribusiness giant General Mills (Cheerios and Häagen-Dazs), automaker General Motors, Mondelez international (Oreo), Pfizer, Audi, and many others took their clicks and nods and stopped paying for ads on the platform.
More than 40 groups Democracy and Anti-Misinformation Campaigns released an open letter to Twitter’s 20 largest advertisers, including Coca-Cola, Google and Disney, urging them to threaten Musk to stop all advertising if he lays out his plan, “Brand safety and community standards to undermine, including the dissolution of content moderation”.
Even the UN stepped up with a thread urging Elon Musk to respect human rights and not only protect freedom of expression, but to stop hate speech, respect privacy while upholding moderation.
Celebrities have also added their two cents. Some left the platform, others announced that they were leaving. One of those who made the most noise is Stephen King. For comparison, Elon Musk originally wanted to charge $20 per month for the subscription, which quite annoyed the author. History doesn’t say if it was he directly that made Elon Musk change his mind…
Elon Musk is clearly a divisive personality. Whatever happens, only the future will tell us what will happen to Twitter…
