Musk proposes turning Twitter into a bank to avoid bankruptcy

Two weeks into Musk's tenure as owner, his confidence in the micro-messaging service has plummeted. On a call with staff yesterday, Musk said that the company could face billions of dollars in losses next year.

The transcript of Musk's staff meeting, where different employees tried to find out what their priorities should be, was posted by The Verge. Musk kept his responses brief and said his top priorities were to grow the user base of the service, compensate creators, and improve the service. He told his team members that if they didn't go hardcore, he would resign. One of his biggest and out-of-the-box ideas, which he says is definitely happening, is tweaking the social networking site to become a digital payments platform.

People will buy a product if it is compelling. It has been my experience at both companies.

Doubts have been raised about the viability of the platform due to Musk's honesty. In addition to dipping into debt by $13 billion when he bought it, Musk now has to deal with interest payments that will total close to $1 billion in the next year.

It was reported that the interest payments would be more than the most recent cash flow from the company. Musk's team feels pressured to perform well and asks him how he will address the cash flow problem.

Musk said that they needed to bring in more cash than they spent. Chapter 11 is not out of the question if we don't do that.

Some wonder if Musk is throwing the term around as a way to stir up staff that feels connected to the platform they built, since the world's richest man facing bankruptcy sounds almost as absurd. The threat of financial ruin has been used by Musk to motivate his employees. According to a person familiar with Musk's management style, he is trying to convey the idea that if people don't work hard, the company will be left in a difficult spot.

The threat of bankrupting affects more than just staff. The debt investors and credit raters were concerned by Musk's statements and sent inquiries to hedge funds and asset managers to see if they wanted to buy out some of the debt. Billions of dollars in losses could be suffered by banks that helped financeTwitter.

The New York Times reported that Musk is pouring money into the company in order to save it from financial ruin.