Twitter Is Going Bankrupt?
Twitter is in a dire financial situation, owing over $13 billion in existing debt in addition to top advertisers pulling out following Musk's takeover and an immediate backfire of the Twitter Blue subscription service.
This article is more than 2 years old
Since the infamous takeover of Twitter by billionaire and business titan Elon Musk, the company has been buzzing with controversy. Revenue has plunged, and the company is facing possible bankruptcy. Advertisers are pulling out, plans to increase revenue are backfiring, the remaining employees are resigning, and the future of Twitter is uncertain.
Elon Musk began taking over Twitter earlier this year in April, and a mere six months later, the deal was finished. Musk immediately started making changes to the company. The changes that were and are being implemented are not being met with open arms and may be further digging the company into a hole.
Since 2019, Twitter has not been on the good side of profit margins. When Elon Musk took over the company, it had a massive debt of 13 billion dollars. This debt is around seven times greater than what the company brings in as far as revenue.
Elon Musk controversially fired hundred of Twitter employees with little to no notice within the first few days of taking over the company. The firing of employees not only sparked colossal debate and prompted employees to take legal action but also triggered a domino effect as other employees were voluntarily leaving. Some of the employees that are leaving the company on their own will include top executives.
The new Twitter has convinced some top executives to stay on a bit longer as Musk needs all the help they can get to turn this company around. In addition to high-profile executives leaving the company at their own will, many paid advertisers are pulling out until they can determine exactly what direction the company will go under the new ownership. Some of the companies pulling out of their advertising deals with Twitter include Chipotle, General Motors, General Mills, Pfizer, Volkswagen, and more.
This pullout of advertisers has caused a ginormous drop in revenue for Twitter. To compact this revenue drop and put the company on a path of profitability, Musk has implemented a new program called the Twitter Blue subscription service. Since the launch of the subscription service, it has not been successful and seems to be stirring up more trouble.
The Twitter Blue subscription service is supposed to allow users to receive the blue, verified check mark that usually only celebrities, brands, and politicians receive. Since the launch of the faulty subscription service, scammers and impersonators have been coming out of the dark and taking their chance to be verified as someone that they are actually not. The company is currently working to solve this issue regarding scammers and impersonators.
Elon Musk has said that Twitter is counting on the success of the subscription service to pull the company out of the negative profit margin and into the green. This seems highly unlikely as there are already so many issues with the validity of the service. As the takeover saga continues, Musk better hope that people and companies start to see his vision of a social media platform of free speech and a place for all.
