You know things are going badly at a company when theories swirl that its new owner is purposefully trying to run it into the ground.

Deliberate or not, Elon Musk’s half-baked product launches and the gutting of Twitter Inc.’s workforce has led to chaos that could prove ruinous. In the last 24 hours, he has floated potential bankruptcy and watched key executives quit. Impersonators of politicians and brands who bought blue badges for $8 have been going viral before Twitter can suspend them. Nintendo’s Mario flipped off Twitter users for nearly two hours before its “verified” copycat account was taken down.

On Friday morning, Twitter appeared to have changed tack and suspended the $8 blue badge initiative. Maybe it was all too chaotic. Or maybe the departure of senior compliance staff has made it much harder to certify new products with the Federal Trade Commission. An in-house lawyer at Twitter warned engineers on Thursday that they needed to sort out FTC compliance themselves or face legal action, according to a memo reported in The Verge.

The lawyer added that Musk’s personal attorney, who currently runs Twitter’s legal department, had said Musk was taking risks because he “puts rockets into space [and is] not afraid of the FTC.”

How much upside is there to all that risk-taking? Not much.

Remember that if all of Twitter’s 400,000 originally verified users paid Musk’s $8 subscription fee, that would amount to about $40 million in revenue a year. That’s a fraction of the $1.2 billion Twitter made in second-quarter sales, about 90% of which came from advertising. But Musk, inexplicably, has said he wants half the company’s future revenue to come from Twitter Blue, currently going down as one of the most confusing and ill-fated product launches in history. (Meanwhile, banks are trying to offload Twitter’s buyout debt for as little as 60 cents on the dollar.)

Musk’s biggest mistake has been driving out Twitter’s advertisers with his behavior. No matter how many millions more people visit Twitter to gawk at the chaos, Musk really could steer the company toward bankruptcy if he can’t turn around his faltering relationship with brands.

Several big names like General Motors Co. suspended their ads on the site, concerned that hate speech and misinformation under Musk would proliferate. Twitter executives had struggled to sell ad space for 2023 at an important advertising conference back in May 2022, because of all the uncertainty around the potential Musk deal, according to a tweet thread by Angelo Carusone, who runs media watchdog Media Matters for America.

Fortunately, hate speech and misinformation didn’t flood the site after Musk’s purchase, according to multiple studies. Misinformation was barely a blip during the US midterms.

But Musk has still messed up the situation, and in several ways. By cutting much of the company’s ad team, he has ended the all-important personal relationships that its executives had with big brands. A misconception about online advertising is that the entire business is driven by algorithms and programmatic auctions run by machines. That’s not the case. “The transactions are digitally driven but the relationship starts with the [global ad sales] leadership,” said Matt Scheckner, chairman of Advertising Week, a conference organizer for the ad industry. “That whole team has been obliterated. … The part that [Musk] has missed is the human connection.”

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