Shock to Elon Musk: Advertisers are keeping distance, danger of bankruptcy looming over X
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London (Uttam Hindu News): Elon Musk took out a loan of about $13 billion to buy Twitter (now called X) and the social media company has to pay about $1.2 billion in interest payments every year. The BBC reported that as large advertisers leave the platform and X cannot pay interest on its loans or pay employees, it may actually go bankrupt. But, this would be an extreme scenario, which Musk would certainly want to avoid. While bankruptcy may seem unimaginable for a company they bought for $44 billion, it is possible. Disney and Apple are no longer advertising on X.
Retail giant Walmart has confirmed that it is no longer advertising on X. “We are not advertising on X as we have found other platforms to better reach our customers,” the report quoted a Walmart spokesperson as saying. Walmart’s departure last month added to the list of companies leaving Ax after Musk endorsed anti-Semitic posts. Apple, Disney, IBM, Comcast and Warner Bros. Discovery are among the companies that are no longer advertising on X. Last year, about 90 percent of X’s revenue came from advertising.
Musk has warned that the loss of big advertisers will lead to the end of X. If the company fails, it will fail due to boycott by advertisers and that will make the company bankrupt. Twitter’s advertising revenue in 2022 was about $4 billion. Insider Intelligence estimates it will fall to $1.9 billion this year. Following Musk’s outcry against big advertisers, X is reportedly aiming to tap small and medium businesses (SMBs) to offset advertising losses from big companies.
A new report from The Financial Times claims that X will now turn to SMBs to boost revenue after Musk angered big brands by endorsing anti-Semitic content. “Small and medium businesses are a very important engine that we have certainly undervalued for a long time,” a company spokesperson was quoted as saying. “This was always part of the plan, now we will go even further with it,” the company said.
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