California: Elon Musk’s acquisition of Twitter, now known as X, was financed by $13 billion in loans, resulting in annual interest payments of around $1.2 billion, but now, the company’s financial sit
California: Elon Musk’s acquisition of Twitter, now known as X, was financed by $13 billion in loans, resulting in annual interest payments of around $1.2 billion, but now, the company’s financial situation is dire, with major advertisers abandoning the platform and dwindling revenue. This raises concerns about X’s ability to meet its debt obligations and pay employees, potentially leading to bankruptcy. While this scenario is considered extreme, it highlights the precarious financial state of X under Musk’s leadership, as per a report covered by news agency ANI.
However, for a company he bought for $44 billion, bankruptcy might sound unthinkable but “it is possible”. Disney and Apple are no longer advertising on X and Musk told companies last week to “Go f*** yourself.”
Retail giant Walmart Refuses To Advertise
Retail giant Walmart has confirmed that it is not advertising on X. “We aren’t advertising on X as we’ve found other platforms to better reach our customers,” a Walmart spokesperson was quoted as saying in reports.
The departure of Walmart adds to the growing list of firms leaving X after Musk endorsed an antisemitic post last month (for which, he apologised last week). Apple, Disney, IBM, Comcast and Warner Bros. Discovery are among the companies no longer buying ads on X.
Percentage Of X’s Revenue From Advertising
Last year, around 90 per cent of X’s revenue came from advertising. Not any more. Musk has warned that the loss of big advertisers would spell the end of X. “If the company fails, it will fail because of an advertiser boycott. And that will be what bankrupts the company,” he said.
“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,” Musk told the audience at The New York Times’ DealBook Summit.
Twitter’s Advertising Revenue
In 2022, Twitter’s advertising revenue was around $4 billion. Insider Intelligence estimates that this year, it will drop to $1.9 billion. After Musk’s outburst against big advertisers, X is reportedly aiming to tap small and medium businesses (SMBs) to offset the advertising loss from big companies.
It was a claimed that X will now turn to SMBs to shore up revenue after Musk angered big brands by supporting antisemitic content, as per a report by the Financial Express.
“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,” the company added.
(With inputs from agencies)