Slaven Vlasic/Getty Images
Elon Musk appears hellbent on taking a wrecking ball to X.
The billionaire owner told major advertisers "go fuck yourself" at The New York Times DealBook summit Wednesday, and may have killed any hope of restoring the company's advertising business.
His diatribe came shortly after major advertisers including Apple, Disney, IBM, and NBCUniversal joined a raft of brands paused advertising on the site after Musk appeared to endorse an antisemitic trope.
He apologized for the post Wednesday, but blamed fleeing advertisers for trying to "blackmail me with money" and attempting to "kill the company."
Musk's latest remarks are unlikely to help X's CEO, Linda Yaccarino, bring those brands back.
"Makes it very tough for Linda," Martin Sorrell, founder and executive chairman of advertising group S4 Capital, said of Musk's comments. "Clients don't like controversy."
Jerod Harris/Getty Images
Musk's middle finger to advertisers could give weight to a theory he wants to deliberately sabotage X.
The billionaire had last year tried to back out of his $44 billion offer to buy what was then Twitter, but financed the deal by borrowing $13 billion from a consortium of banks. Those banks have since been trying to sell the debt — which looks increasingly worthless as Musk drives X into the ground. In the meantime, X and Musk must pay millions of dollars in interest to their financiers.
Musk may be looking to reduce those payments by ensuring X isn't worth very much, Bloomberg commentator Matt Levine posited in January.
"The banks want to sell it — they are not normally in the business of holding on to buyout debt for this long — and if Musk bought it he could lower his interest payments," Levine wrote. "In theory, the more unpleasant he makes it for the banks, the cheaper the debt will get."
"I don't understand Elon's endgame," Lou Paskalis, former head of global media at Bank of America and CEO of marketing consultancy AJL Advisory, told Business Insider.
Paskalis, who has been a vocal critic of Musk's Twitter takeover, said the "go fuck yourself" comment was likely pre-planned, making it clear Musk doesn't want to cultivate advertisers, despite advertising accounting for the majority of X's revenue.
"But he's smart, he knows it's illegal — although usually hard to prove — to intentionally devalue an asset to manipulate creditors, and he knows how to make money so I have to believe he sees an entirely new revenue model that the rest of us don't yet recognize," Paskalis added.
X is now worth less than half the amount Musk paid for it, BI's Grace Kay and Kali Hays reported last month. Musk earlier said the company had negative cash flow due to the drop in ad revenue and its heavy debt load.
Musk has previously said he wants to make X an "everything app" to include features like video and payments, and one that is less reliant on ad dollars. He has already moved to diversify X's revenue by rolling out a paid subscription feature.
But it's not been enough to make up for the shortfall in advertising.
"There is no way back, there is no way to reverse the statement Elon made yesterday," said Ruben Schreurs, chief strategy officer at the marketing consultancy Ebiquity, which works with major advertisers. "This is the nail in the coffin."
Ebiquity, which works with 70 of the world's top 100 advertisers, said only two of them advertised on X in September.
X CEO Yaccarino, a former NBCUniversal ad executive who was charged with restoring the company's ad business, sat in the audience at the DealBook conference on Wednesday.
In the hours after, she tweeted in support of Musk, saying the interview had been "wide ranging and candid," offering him a chance to apologize for his earlier tweets and provide "an explanation and an explicit point of view about our position."
"And here's my perspective when it comes to advertising: X is standing at a unique and amazing intersection of Free Speech and Main Street — and the X community is powerful and is here to welcome you," Yaccarino wrote in the tweet.
X didn't immediately respond to Business Insider's request for comment, made outside of normal working hours.
