Twitter now faces bankruptcy – The Cryptonomist

The situation was already serious in terms of future outlook when Elon Musk last month finalized the purchase of Twitter for $44 billion through his own finances and those of a pool of investors, but a very tough plan was also ready to be implemented. 

“There is no way to sweeten the pill on the economic outlook and how it will impact an ad-addicted company like Twitter.”

The entrepreneur’s pragmatic commentary leaves no room for doubt, the situation is serious to the point that the road to bankruptcy is not to be ruled out a priori. 

Despite cutting half the staff and almost all the management, despite early retirements, changing the business model and mode of operation the situation remains serious. 

After the delisting of the Twitter stock from the New York Stock Exchange, Musk and his team wasted no time in trying to secure the social and improve it from a functionality standpoint. 

Smart working gets banned at Twitter

Yet another desperate move to increase productivity and streamline costs is the recent ban on smart working for Twitter employees. 

In a statement, Elon Musk explains that working from home will no longer be allowed and will be replaced by in-person work for at least 40 hours per week (the normal number of hours for an employee).

Generalizing is never too fair and this Musk does it well so he was quick to explain how each case may be evaluated:

“If there are extraordinary collaborators for whom this will not be possible, I will judge and approve each single case directly.”

Shutting down smart working is part of a modus operandi of the South African naturalized Canadian entrepreneur and has already affected his other companies such as SpaceX and Tesla. 

The decision is not only peremptory and impactful for the social network’s pockets, but also follows a not-too-veiled invitation to resign if employees don’t like it.

Reality knocks at the door 

“The economic situation that lies ahead is disastrous, especially for a company like ours that depends on advertising in a difficult economic climate.”

With these words, the Tesla founder puts his hands out drawing a scenario of struggle in which the way Twitter’s business model was set up, there will be quite a bit of work to be done with the albeit remote probability that the efforts may not be enough.

In addition to the mega-cutting of staff and much of the management team, the transformation of the social network looks very much like an open-air construction site that is also going through a willingness to focus on subscriptions very much in the style of Netflix or Amazon. 

In the new owner’s plans, the company should cover about half of its revenue just from subscription revenues in the coming year assuming Twitter has not closed its doors first. 

Another major change introduced by the new direction of the social network is that concerning the fateful blue ticks.

The blue ticks, which certify that the profile they accompany is verified in identity and constitutes an important person, will be subject to a subscription fee. 

The “blue tick” (Twitter Blue) subscription has been placed at $8 per month, and according to some analysts and commentators on the social network, it could favor the opposite result of generating more fake profiles in an easy way. 

To date, running a profile under another person’s name is possible but the rule states that this must be explicitly stated and highlighted or the profile will be deleted without notice.

The new verification system prepared by the social platform’s development team and soon to be implemented goes in this direction. 

“In the coming days, we will add granularity to the verified badge, such as organizational affiliation and identity verification.”

This is the comment of the SpaceX entrepreneur who hints at more thorough verifications before releasing any badges to users, even if for money. 

In no uncertain terms, Twitter is in serious danger of bankruptcy, this is perceived to the point that users themselves, in some cases abandon the social network in favor of other similar but less emblazoned platforms such as Mastodon which gains over 1 million users in the last few hours at the expense of Musk’s new acquisition.