Report: Musk Warns of Twitter Bankruptcy as Executives Quit

Facts

With some advertisers leaving the platform and top executives resigning from their positions, Twitter CEO Elon Musk reportedly hinted at the possibility of the company filing for bankruptcy if it's unable to reverse its sharp decline in revenue.
On Thursday, executives who departed from the company included head of safety and integrity, Yoel Roth, chief information security officer Lea Kissner, chief privacy officer Damien Kieran, and chief compliance officer Marianne Fogarty.
Musk's reported warning of potential bankruptcy came during his first all-hands meeting with staff since taking the helm at Twitter, which also included a discussion of possible 80-hour work weeks according to sources.
Musk took on $13B in debt as part of his purchase of Twitter and faces $1.2B in interest over the next 12 months — an amount exceeding the company's most recently disclosed cash flow of nearly $1.1B in June.
Twitter is also facing warnings from the Federal Trade Commission (FTC), with which the company has a settlement requiring it to perform privacy reviews before making any changes to its products. In a letter reportedly posted on Twitter's privacy team's Slack channel, a lawyer allegedly encouraged employees to use whistleblower protections “if you feel uncomfortable about anything you’re being asked to do”.
This comes after Musk fired roughly half of Twitter's 7K employees, leaving some with concerns about the company's ability to retain strong privacy and security measures for its users.

Sources: DW, Guardian, Bloomberg, and Daily Mail.

Narratives

Narrative A, as provided by Slate. With the FTC breathing down his neck, advertisers leaving in droves, and staff cuts leaving users' privacy vulnerable, Twitter faces a genuine risk of collapse. Revenue decline aside, the FTC could fine the company billions of dollars if it feels it's breached its settlement, which would virtually evaporate any prospects of Musk making it out of this dilemma unscathed.
Narrative B, as provided by Fortune. Musk's Twitter purchase can be seen as a calculated business strategy or as an attempt to dominate the news cycle. Either scenario will likely bring success to Musk and his companies, despite the seemingly feeble start. While some might say he's stretched too thin, it would be foolish to think he doesn't have some tricks up his sleeve to boost all three of his companies' valuations through his new social media platform.