The IT Nerd

As the days go on, it’s clear that Elon Musk is desperate to somehow find some way to turn Twitter into a good news story as everything that is coming from the troubled social media platform is bad news. Or worse news. Elon’s latest signs of desperation come in a pair of areas. Let’s start with the privacy one:

Twitter is working on plans to force some users to agree to data sharing or lose access to the app in a bid to save its ad business, according to Platformer.

Elon Musk’s platform, like Google and Facebook, currently allows users to opt out of personalized ads, but this option could soon disappear.

Many users never turn this feature off in the first place, but the company is also considering forcing users to share more data, which can then be sold to advertisers, Platformer’s report said.

This includes sharing user locations and phone numbers for targeted ads, even though the latter is necessary for two-factor authentication.

And:

The plans could hit a snag in Europe, because EU rules say that users have the legal right to withdraw data-sharing permissions at any time.:

Under one plan being considered, users could only opt out if they subscribe to Twitter Blue — which costs at least $8 a month. But that would breach Apple’s rules which outlaw apps from forcing a choice between payment and advertiser tracking.

So Elon is so desperate to make a buck that he’s willing to pick a fight with both Apple and the EU. Plus I am pretty sure the FTC would be knocking on his door to have a word with him as this is the sort of thing that got Twitter into trouble before with them. Then there’s the fact that now this is out, it will send even more Twitter users to the exits who are sick of Elon and his haphazard leadership style. Which of course will give advertisers less incentive to advertise on the platform, taking money out of Elon’s pockets in the process.

Elon’s desperation is also starting to show in terms of him risking the wrath of the legal gods:

Musk appears to be gearing up for legal battles at Twitter, which he purchased in October for $44 billion, according to seven people familiar with internal conversations. He and his team have revamped Twitter’s legal department and pushed out one of his closest advisers in the process. They have also instructed employees to not pay vendors in anticipation of potential litigation, the people said.

To cut costs, Twitter has not paid rent for its San Francisco headquarters or any of its global offices for weeks, three people close to the company said. Twitter has also refused to pay a $197,725 bill for private charter flights made the week of Musk’s takeover, according to a copy of a lawsuit filed in New Hampshire District Court and obtained by The New York Times.

Twitter’s leaders have also discussed the consequences of denying severance payments to thousands of people who have been laid off since the takeover, two people familiar with the talks said. And Musk has threatened employees with lawsuits if they talk to the media and “act in a manner contrary to the company’s interest,” according to an internal email sent last Friday.

The aggressive moves signal that Musk is still slashing expenditures and is bending or breaking Twitter’s previous agreements to make his mark. His reign has been characterized by chaos, a series of resignations and layoffs, reversals of the platform’s previous suspensions and rules, and capricious decisions that have driven away advertisers.

If Elon wants to get sued out if existence, this is a great way to do it. Not paying your rent and not paying severance at the very least will be expensive. And I am pretty sure that in the worst case, some government or law enforcement agency would investigate this to see if it’s illegal. Also, if you read this story, he’s dumped significant parts of his legal team. Some of whom have bailed him out of trouble before. That’s a sign that Elon doesn’t like the counsel that they’re giving him as he strikes me as the type who only wants to hear answers that he likes.

Finally, banks are having trouble with Twitter’s debt. Big trouble:

Some of the banks that lent Elon Musk $13 billion to buy Twitter are preparing to book losses on the loans this quarter, but they are likely to do so in a way that it does not become a major drag on their earnings, according to three sources with direct knowledge of the situation.

Banks typically sell such loans to investors at the time of the deal. But Twitter’s lenders, led by Morgan Stanley, could face billions of dollars in losses if they tried to do so now, as investors shy away from buying risky debt during a period of economic uncertainty, market participants said. In addition, Twitter has seen advertisers flee amid worries about Musk’s approach to policing tweets, hitting revenues and its ability to pay the interest on the debt.

Banks still have to mark the loan to its market value on their books and set aside funds for losses that are reported in quarterly results. In the absence of a price determined by actual sales of the debt, however, each bank can decide how much to write it down based on its market checks and judgment, according to the three sources who are familiar with the process of determining the value of such loans.

Elon’s issues aren’t going to help this situation that his lenders find themselves in. I would watch this as banks do not like to lose money and that may add to Elon’s problems. Of which there are many.

Like I said yesterday, I think we are in the endgame when it comes to Twitter. I think it’s just a matter of time until the final nails in the coffin are hammered in.

This entry was posted on December 14, 2022 at 8:18 am and is filed under Commentary with tags Twitter. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.