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More advertisers are likely to flee Elon Musk's social media platform X after the billionaire lashed out at some of the biggest names in the media industry at a New York Times DealBook event for dropping out of the platform, analysts said on Thursday.
Walt Disney and Warner Bros. Discovery suspended advertising on X earlier this month following his endorsement of an antisemitic post that falsely claimed members of the Jewish community were stoking hatred against white people.
After apologizing for his post at the event on Wednesday, Musk unleashed a profanity-laced tirade against some of the advertisers for fleeing the platform.
The Tesla chief acknowledged that an extended boycott by advertisers could bankrupt X, formerly Twitter, but suggested that the public would blame the brands and not him for a potential collapse.
The company has come under fire for lax content moderation, especially from advertisers who do not want their ads appearing next to inappropriate content.
"We believe there is risk that more companies will stop advertising on X; at least on a short-term basis," D.A. Davidson & Co analyst Tom Forte said.
"It is fair to say this makes the company's subscription efforts more important and potentially means it may need more than half its revenue to come from subscriptions," he said.
Monthly U.S. ad revenue at X has declined at least 55% year-over-year each month since Musk bought the company in October 2022, Reuters reported last month.
"Musk has stated that Twitter is worth a lot lesser than the $44 billion he had paid for it. It is hard to argue that will change quickly if advertisers take deep offence to what he said yesterday," said Russ Mould, investment director at AJ Bell.
(Reporting by Chavi Mehta and Jaspreet Singh in Bengaluru; Additional reporting by Aby Jose Koilparambil; Editing by Anil D'Silva)