Elon Musk, who took a huge loan to buy Twitter (later renamed X) seems to be getting into another trouble with the platfrom and its advertisers. Musk took around a USD 13 billion loan, out of which the social media company has to pay around USD 1.2 billion as interest every year.
It has been reported that the big advertisers have been quitting lately from the platform and X is unable to pay the interest on its loans or pay to employees too. It is reported that the platfrom might go bankrupt, the BBC reported.
The report further said, “But that would be an extreme scenario that Musk would surely want to avoid.”
However, for a company Musk bought for USD 44 billion, the term bankruptcy might sound unthinkable but ‘it is possible’.
It was reported further that Disney and Apple are not advertising on X anymore and Musk told the companies last week to "Go f*** yourself.”
Walmart, the retail giant has confirmed further that it is not advertising on X.
In reports, the spokesperson of Walmart stated, "We aren’t advertising on X as we’ve found other platforms to better reach our customers.”
The departure of Walmart keeps adding to the growing list of firms and leaving X after Musk endorsed an antisemitic post last month (for which, he apologised in November end).
The companies that are not buying ads on X are:
- Warner Bros.
How advertisements drove the platform
Last year, around 90 percent of X's revenue came from advertising itself, but now, things are different.
It was earlier when Musk himself warned that the loss of big advertisers could be the end of X. He said, "If the company fails, it will fail because of an advertiser boycott. And that will be what bankrupts the company.”
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At The New York Times' DealBook Summit, Musk told the audience, "What this advertising boycott is going to do is kill the company. And the whole world will know that those advertisers killed the company, and we will document it in great detail."
In 2022, Twitter had around $4 billion in advertising revenue. Insider Intelligence has estimated that this year, it will drop by $1.9 billion.
After Elon Musk's outburst against big advertisers, X is said to be aiming at tapping small and medium businesses (SMBs) to offset the advertising loss from big companies.
A new report by The Financial Times has claimed that X will now turn to SMBs to shore up the revenue after Musk angered big brands with the support of antisemitic content.
The company said, “Small and medium businesses are a very significant engine that we have definitely underplayed for a long time," a company spokesperson was quoted as saying. “It was always part of the plan, now we will go even further with it.”
Inputs from IANS