Musk wants users to pay for verification on Twitter

Billionaire Elon Musk is already busy tapping into new cash flows shortly after taking over Twitter. He now wants users to pay for the blue ticks that indicate verified accounts.

New-fangled Twitter owner Elon Musk does not fail to leave his mark on the messaging platform. After he immediately knocked on the management’s door last week and brought in a team of confidants, it is slowly becoming visible on the website itself.

According to various American media, Musk has ordered his team to roll out a new program by next Monday, where users would have to pay for the verification of their account. The blue ticks that indicate a person’s or brand’s account is authentic are free today.

Specifically, the intention is for the verification to become part of Twitter Blue, a paid package with extra functionalities for hardcore Twitter users. It costs $4.99 a month today and gives you additional options to organize your Twitter feed, undo misspelled tweets, or set an NFT as your profile picture.

The blue ticks, which are mainly used by brands, governments, celebrities or journalists, would be part of the payment features from next week. Subscribers also have to pay a lot more for it. According to tech website The Verge, the price will be raised to $19.99 per month. Those who are already a verified user today would have 90 days to subscribe. If not, the blue tick will disappear.

Under pressure

‘Chief Twit’ Elon Musk has been vocal for months about the presence of fake accounts and bots on Twitter, a reason he cited for canceling the purchase – to no avail. On Sunday, he announced via Twitter that the verification process is being worked on. How the proposal to make users pay for verification solves the problem of spam accounts is not clear.

When Musk announced the purchase, Musk told his financing banks that he would cut costs and open up new sources of revenue.

What is clear is that after the $44 billion acquisition, Musk is under pressure to quickly generate more money with the messaging platform to keep the financiers and banks that backed him in the takeover happy. Musk lives off, among other things, $13 billion in bank financing (see box below). He promised those banks in April to quickly withdraw more money from the platform, while at the same time sharply reducing costs.

Work is also underway on the second part of that plan. According to various American media, Musk has instructed managers throughout the organization to prepare a list of personnel who may be dismissed. According to some sources, Musk will announce a massive layoff of up to 50 percent of the staff in the coming days. Today, 7,500 people still work in the company.

How did Musk finance the Twitter deal?

Elon Musk paid $44 billion for the Twitter acquisition. Although he is the richest man in the world, that money did not come entirely out of his own pocket. His personal contribution is just under $27 billion, primarily due to the sale of a large batch of Tesla stock.

For a smaller part of the financing – about 5 billion dollars – Musk convinced investment funds or well-heeled co-entrepreneurs. Oracle CEO Larry Ellison, Qatar’s sovereign wealth fund and Saudi Prince Al-Waleed bin Talal contributed among others.

The rest of the money is advanced by a consortium of banks, including Morgan Stanley, Bank of America, Barclays, Société Générale, BNP Paribas and Japan’s Mizuho. These banks are at risk of incurring significant paper losses on the transaction due to the highly altered market conditions in a few months.

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