x, formerly twitter, can go bankrupt; what is elon musk doing
Elon Musk — the founder, chairman, CEO and chief technology officer of SpaceX; the CEO, product architect and former chairman of Tesla, the founder of the Boring Company and xAI; the co-founder of Neuralink and OpenAI; the president of the Musk Foundation; and the owner, chairman and CTO of X Corp (formerly Twitter) — is in trouble.
In October 2022, Elon Musk took out a $13 billion loan to buy Twitter (now called X). The social media company, X, now has to pay about $1.2 billion in interest payments every year. Amidst all the problems, X can go bankrupt if advertisers quit the social media platform.
What is Elon Musk doing?
Elon Musk is already facing backlash from big advertisers for his critical social media posts. Elon Musk also called advertisers, who suspended their advertising on X, as blackmailers.
He said at The New York Times’ DealBook Summit, “If somebody’s going to try to blackmail me with advertising, blackmail me with money, go f**k yourself. Is that clear?”
According to a BBC report, if big advertisers quit the social media platform then X cannot pay the interest on its loans or pay salaries to employees. Elon Musk’s X could actually go bankrupt if big advertisers keep on quitting the platform.
The BBC report said, “That would be an extreme scenario that Musk would surely want to avoid.”
Disney, an American multinational mass media and entertainment conglomerate, and Apple, an American multinational technology company, are no longer advertising on social media platform X.
Walmart, an American multinational retail corporation, also said, “We aren’t advertising on X.” IBM, Discovery, Comcast and Warner Bros are no longer buying ads on X.
Could X go bankrupt under Elon Musk?
In 2022, around 90 per cent of X’s revenue came from advertising. Advertisers played an important role in the success of Twitter (now X).
Previously, Elon Musk said, “If the company fails, it will fail because of an advertiser boycott. And that will be what bankrupts the company.”
He told the audience at The New York Times’ DealBook Summit, “What this advertising boycott is going to do is kill the company. And the whole world will know that those advertisers killed the company.”
Last week, Elon Musk received resignation from X employees. Despite receiving bonus checks, many employees decided to leave the Elon Musk-led company. They were reportedly not happy at X. Recently, various sales employees also resigned from their post.