Elon Musk has unleashed chaos on Twitter in the past few weeks since taking over the company, and experts say lawsuits, regulatory interference and an eventual financial meltdown could loom.
The billionaire allowed his decision to be made public from the start, tweeting about the new policies before immediately retracting them and polling users about features like verification.
“Please note that Twitter is going to do a lot of stupid things in the coming months,” Musk chirp. “We will keep what works and change what does not.”
Experts say this repetitive approach to driving such a large company is unprecedented, and could cause problems for Twitter’s future, as advertisers flee the platform and troubled regulators. Discuss potential investigations.
“He’s trying to decide what to do and obviously doesn’t have a plan – it’s an absolute mess,” Anat Alon Bey said. Professor of Law at Case Western Reserve University in Ohio. “There should be a responsible adult in the room, and that’s not Elon.”
Twitter and caught the face of litigation
Analysts say that while the dissident Mask’s management style in Twitter Not much different from the way he ran businesses in the past, and those actions weren’t without consequences.
The billionaire has faced lawsuits at other companies he leads, including space company SpaceX, car company Tesla and brain-machine interface technology developer Neuralink.
As Twitter’s meltdown continues, Musk sued Goes to court next week Investors in Tesla accused the billionaire of overpaying himself with not investing enough time in the company. Tesla investors have sued Musk in the past Accusations of harassment in the workplace Brand damage and stock fraud On his tweet about making Tesla private in 2018.
Twitter is already facing a lawsuit from some of the thousands of employees who were laid off by Musk last week. who said They have not been given adequate notice of termination of service or adequate termination indemnity. Alon Beck said this is just the beginning of the company’s legal headache.
“Musk will face lawsuit after lawsuit,” she said. “There are many issues that he has and will continue to have in connection with this acquisition, and a lot of grounds for legal action.”
Regulatory intervention on the horizon
Aside from ongoing litigation by investors and employees, Musk may face investigations by regulators for his actions on Twitter, following allegations that the company is evading Federal Trade Commission (FTC) regulations.
the edge mentioned On Thursday, Twitter may ignore following the FTC’s order in May after agreeing to a settlement with the agency that would require it to conduct privacy reviews before making changes to products.
According to the report, Musk had “already bypassed standard data governance processes,” and an internal corporate lawyer warned that the company could open itself up to billions of dollars in fines. The Federal Trade Commission said in response that it is “following recent developments on Twitter with deep concern.”
“No CEO or company is above the law, and companies must follow our approval decisions,” the agency said in a statement. “Our revised order gives us new tools to ensure compliance, and we are ready to use them.”
Bankruptcy fears as advertisers flee
Advertisers are already starting to jump off Twitter, with General Mills, General Motors and other companies Stop Messages are on the platform indefinitely due to concerns about the company’s instability. Civil rights groups are calling for more companies to sever ties with Twitter over hate speech and misinformation.
The advertisers’ response underscores how Musk’s leadership style has failed to translate to Twitter. John B Wehbe, professor of media innovation and technology at Northeastern University, said the company – unlike Musk’s other projects – relies largely on advertising for funding, which makes his erratic behavior even more impactful on the company’s bottom line.
“Companies like Tesla or SpaceX rely on hardware more than the public is saying,” Wehbe said. “But this is a business where advertisers can easily get away with, so it’s not particularly smart to create confusion and isolate large sections of the user base.”
This is bad news for Musk, who is under heavy pressure after buying Twitter for $44 billion to make the company profitable. The billionaire said Twitter is losing more than $4 million a day, telling employees Thursday that “bankruptcy is not out of the question.”
While his erratic management style may have served him well at other companies, a platform like Twitter — which largely depends on advertisers for its Funding – It can backfire quickly.
Musk’s experience at leading companies with an attitude of “I have the big picture in mind and we’ll figure out how to get there along the way” is not an experience that translates well into an important information and advertising platform on which millions depend on the availability, stability, and reliability of technology and content.”
“It is time to set aside the arrogance of the independent showman and formulate a short, medium and long-term strategy,” Shah added.
