'Bankruptcy not out of question': Twitter boss Elon Musk warns amid negative cash flow

Twitter's new boss Elon Musk, on Thursday, warned that the microblogging site might land in bankruptcy if it would witness negative cash flow in the next year. As per multiple media reports, Musk reportedly told Twitter’s product team members that the company he just bought could see “the net negative cash flow of several billion dollars” in 2023.

Also, he stressed that “bankruptcy is not out of the question” if that happens. "It is not feasible to suffer massive losses worth millions or billions," he said to the team after firing more than 7,000 employees after his dramatic takeover. However, he noted that the company may evade the situation if the product is really compelling. "That has been my experience at SpaceX and Tesla," Musk said.

Further, announcing his plan, the world's richest man told the staff that he would add video content in order to boost the revenue from the social media platform. Also, he asserted that the content creators will be paid to make it more functional. "The company needs to bring in more cash than we spend," he said. The microblogging site said to brace for “difficult times ahead” that might end with the collapse of the social media platform if they can’t find new ways of making money.

It is worth mentioning ever since SpaceX CEO Musk took over the microblogging site, Twitter, he has been actively advocating for the subscription model of the platform. Although he has been facing immense criticism for his premium plan for verified users, Musk asserted he would implement a charging model. Notably, the verification badge, which is often called a "blue tick" mark, is granted to celebrities, politicians, business leaders, and journalists. Besides, the social media giant also uses the blue check mark to verify activists and people who suddenly find themselves in the news, as well as little-known journalists at small publications around the globe.

Musk will continue with his plan

According to Twitter, it is essential to provide a verification badge to notable personalities in order to curb misinformation coming from accounts that are impersonating people. Until now, the verification badge is free but now the world's richest man has confirmed the service will not be free and the users have to pay $8 a month. "Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message,” wrote Musk, before he described a dire economic climate for businesses like Twitter that rely almost entirely on advertising to make money. “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” Musk said. “We need roughly half of our revenue to be subscription.”

Image: AP