X may go bankrupt under Elon Musk if advertisers keep fleeing

Till last year, 90% of X's revenue came from advertising, and Musk warns their departure could be the end for X.

As big advertisers quit the platform, X cannot pay the interest on its loans or pay employees (photo: DW)
As big advertisers quit the platform, X cannot pay the interest on its loans or pay employees (photo: DW)


The loans Elon Musk took out to buy Twitter (now called X) was about $13 billion and the social media company has to pay about $1.2 billion in interest payments every year.

As big advertisers quit the platform and X cannot pay the interest on its loans or pay employees, then it could actually go bankrupt, the BBC reported on Sunday. “But that would be an extreme scenario that Musk would surely want to avoid,” the report mentioned.

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 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.

Last year, around 90 per cent of X's revenue came from advertising. Not anymore. 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 had told the audience at The New York Times' DealBook Summit.

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.

A new report by The Financial Times has claimed X will now turn to SMBs to shore up revenue after Musk angered big brands by supporting antisemitic content.

“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.

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