- Title: Musk underestimated Twitter train wreck, says analyst
- Date: 18th November 2022
- Summary: COMMACK, NEW YORK, UNITED STATES (NOVEMBER 18, 2022) (REUTERS) (SOUNDBITE) (English) WEDBUSH SECURITIES MANAGING DIRECTOR DANIEL IVES SAYING: "This is essentially Game of Thrones between Musk and the Twitter employees, and it's a black eye for Musk in terms of, I think, the way that looks publicly and even on the brand around Tesla. And I think it just shows, I mean, this is really a quicksand situation that he's trying to fix. And the more he does, the more damage he does, which continues to just be a twilight zone as it plays out." WHITE FLASH (SOUNDBITE) (English) WEDBUSH SECURITIES MANAGING DIRECTOR DANIEL IVES SAYING: "Well, it's 240 million users. There's going to be bugs, there's going to be patches. We can see outages across the board, it's a skeleton staff right now. And I think that's pretty scary, especially on the cybersecurity side. I mean, this can really become a free-for-all in terms as it all plays out. And I think that the thing with Twitter and Musk, the one thing you know that's almost guaranteed is that you will never be surprised. So you never know what's coming around the corner going into the weekend." WHITE FLASH (SOUNDBITE) (English) WEDBUSH SECURITIES MANAGING DIRECTOR DANIEL IVES SAYING: "I'm really focused on key employees in terms of do they leave Twitter? Do they get off the ship? Because numbers are one thing - you start to lose some key engineers, developers, key people internally. I think that's where this thing can really cascade a lot more worse and then how much money they're going to bleed. Is Musk going to need more money in? Do you have backers, investors that ultimately would plug the gap. I think these are questions ahead." WHITE FLASH (SOUNDBITE) (English) WEDBUSH SECURITIES MANAGING DIRECTOR DANIEL IVES SAYING: "Look, I think the problem is that Musk is trying to handle Twitter the way he has SpaceX and Tesla. And it's a much different animal, social media, long established history, culturally within San Francisco. I think Musk is definitely not doing any candlelight dinners and ping pong in the Twitter cafeteria and that's a big problem, because employee morale suffers and you need engineers and developers to ultimately maintain the Twitter platform. 240 million users. Definitely some dark days ahead for Musk, for a $44 billion deal where the valuation today is probably closer to 15 billion. " WHITE FLASH (SOUNDBITE) (English) WEDBUSH SECURITIES MANAGING DIRECTOR DANIEL IVES SAYING: "I think Twitter is going to continue to bleed money. They're going to need to turn this around. But ultimately, the key, the golden goose is advertisers. Will advertisers come back to the platform? Now, obviously, content moderation is going to be a focus in terms of how Musk handles it, but it's a wild card situation. And this madness that we see with Twitter, I think it does pose some threats to where this platform goes. It's a fork in the road. Does he turn it around, Musk or is it a MySpace or AOL? I think next 3 to 6 months are some pretty important time ahead. " WHITE FLASH (SOUNDBITE) (English) WEDBUSH SECURITIES MANAGING DIRECTOR DANIEL IVES SAYING: "Well, ultimately, for Musk, the 240 million users are the key. I mean, advertisers at the end of the day, if there's no major changes in content moderation, surely they'll come back. But timing is going to be key. You can't cut your way to growth. And right now, I think Musk definitely (INAUDIBLE). I think there's a feeling right now that this situation is just continue to go more and more into a train wreck. And I think it's something even Musk himself underestimated. You see on Twitter on a daily basis, continues a sort of tongue in cheek in terms the way he talks about it, which is definitely not a great look." WHITE FLASH (SOUNDBITE) (English) WEDBUSH SECURITIES MANAGING DIRECTOR DANIEL IVES SAYING: "Look, I think the world, from sports to business to every other aspect, lifestyle, has gotten used to Twitter. Its a key part of, I think, the everyday social fabric. The problem is you have to monetize it. And I think that continues to be the 44 billion question for Musk, can he?"
- Embargoed: 2nd December 2022 17:38
- Keywords: Musk Twitter analyst layoffs
- Location: COMMACK, NEW YORK, UNITED STATES
- City: COMMACK, NEW YORK, UNITED STATES
- Country: US
- Topics: North America,Government/Politics
- Reuters ID: LVA001055218112022RP1
- Aspect Ratio: 16:9
- Story Text: Twitter will continue to bleed money if it's new owner Elon Musk doesn't find a way of bringing back advertisers and monetizing the platform, analysts say, amid a new wave of resignations from the social media giant.
Hundreds of Twitter Inc employees are estimated to have decided to quit the beleaguered company following a Thursday deadline from new owner Elon Musk that staffers sign up for "long hours at high intensity," or leave.
"This is essentially Game of Thrones between Musk and the Twitter employees," says Dan Ives of Wedbush Securities. "This is really a quicksand situation that he's trying to fix. And the more he does, the more damage he does."
The departures highlight the reluctance of some of Twitter's 3,000 or so employees to remain at a company where Musk earlier fired half of the workforce including top management, and is ruthlessly changing the culture to emphasize long hours and an intense pace.
"I think Musk is definitely not doing any candlelight dinners and ping pong in the Twitter cafeteria and that's a big problem, because employee morale suffers and you need engineers and developers to ultimately maintain the Twitter platform," says Ives.
Musk took to Twitter late on Thursday and said that he was not worried about resignations as "the best people are staying." Musk met some top employees on Thursday to try to convince them to stay, said one current employee and a recently departed employee who is in touch with Twitter colleagues.
The company also notified employees that it will close its offices and cut badge access until Monday, according to two sources. Security officers began kicking some employees out of one office on Thursday evening, one source said.
The departures include many engineers responsible for fixing bugs and preventing service outages, raising questions about the stability of the platform amid the loss of employees.
On Thursday evening, the version of the Twitter app used by employees began slowing down, according to one source familiar with the matter, who estimated that the public version of Twitter was at risk of breaking during the night.
"I think there's a feeling right now that this situation is just continue to go more and more into a train wreck. And I think it's something even Musk himself underestimated."
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