Brand Exodus: Musk Tirade Sparks Mass Departure from X

Brand Exodus: Musk Tirade Sparks Mass Departure from X

Elon Musk’s social media platform, X, is facing a potential mass departure by advertisers after the billionaire criticized major media players during a New York Times DealBook event. This backlash follows recent suspensions of advertising by Walt Disney (DIS.N) and Warner Bros. Discovery (WBD.O) due to Musk’s endorsement of an antisemitic post that falsely accused the Jewish community of fueling hatred against white people.

After apologizing for the controversial post, Musk launched a profanity-laced tirade against advertisers who had withdrawn from the platform. While acknowledging the possibility of an extended advertiser boycott leading to X’s potential bankruptcy, Musk suggested that the public would blame the brands, not him, for such a collapse.

X, formerly known as Twitter, has been criticized for lax content moderation, particularly by advertisers concerned about their ads appearing alongside inappropriate content. Analysts, such as Tom Forte from D.A. Davidson & Co, express concerns about the risk of more companies ceasing advertising on X, at least in the short term. Forte emphasizes the increasing importance of the company’s subscription efforts, suggesting that over half of its revenue may need to come from subscriptions to mitigate potential losses.

Monthly U.S. ad revenue for X has reported a decline of at least 55% year-over-year each month since Musk acquired the company in October 2022, as per Reuters. Musk’s statement that Twitter is worth less than the $44 billion he paid for it raises questions about the platform’s value, particularly if advertisers strongly react to recent events, according to Russ Mould, investment director at AJ Bell. The situation underscores the challenges X faces and emphasizes the urgency for strategic shifts in revenue generation.

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Emily Johnson

Meet Emily Johnson, a rising star in the world of news reporting. Armed with a Communications degree from Harvard University, Emily's writing is a perfect blend of creativity and fact-based journalism. She specializes in human-interest stories, bringing the personal touch that makes every story relatable. Whether it's heartwarming tales or societal issues, Emily is your guide to the trending news you won't want to miss.

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