Is X at risk of bankruptcy with Elon Musk at the helm?

Experts are puzzled by Elon Musk's recent explicit tirade against advertisers boycotting Twitter, known as X. The ongoing exodus of advertisers from the platform has raised concerns about the survival of X. Musk's acquisition of X had sparked chaotic interviews, during one of which he mentioned that Twitter being a preferred platform for advertising by big brands like Disney and Apple indicated its suitability for advertising. However, the departure of Disney and Apple from Twitter and Musk's offensive comments towards departing companies, including using the term "bankruptcy," suggest that the ad boycott is significantly impacting X's finances. Around 90% of X's revenue last year came from advertising, highlighting its heavy dependence on ad revenue. Experts note that no signs of advertisers returning are visible, and Walmart's recent decision to halt advertising on X exacerbates the situation. Musk's direct attack on Disney's CEO further dissuades advertisers from engaging with X. Publicly attacking the companies that fund X is anticipated to have negative consequences for the platform. If advertisers permanently leave, it poses a considerable challenge for X as subscriptions cannot replace the revenue generated from advertising. As Twitter's ad revenue is predicted to decline to $1.9 billion this year from $4 billion in 2022, the platform faces mounting financial pressures. X's significant expenses include staffing and loan repayments incurred by Musk for the acquisition, amounting to approximately $13 billion. Failure to service these debts or meet payroll could push X towards bankruptcy. While Musk has various options to mitigate these challenges, his reluctance to invest more money suggests he seeks alternative solutions. Renegotiating loan terms or resorting to bankruptcy remain as possibilities, but bankruptcy could harm Musk's reputation and borrowing prospects. However, experts believe X will not simply shut down in a bankruptcy scenario, and creditors could appoint a trustee to continue operations. To resolve its problems, X needs to identify new income streams promptly. Musk has already launched an audio and video calls service and aims to compete with platforms like Twitch. X's potential lies in its vast data archive, which can be utilized for training chatbots. Nonetheless, these options do not immediately compensate for the loss of advertisers. Musk's outburst and his unclear revenue model only contribute to the confusion surrounding X's future.