The impact of Musk’s criticism on X advertisers on Disney, Meta, and other companies

Elon Musk’s recent outburst against advertisers may hurt X (formerly Twitter) as brands take their advertising dollars elsewhere, but it’s not the only one facing backlash.

On the flip side, those that stand to benefit include more than just X’s social media competitors.

Musk slammed advertisers in an interview with the New York Times at its DealBook Summit Wednesday. He said brands that pulled their advertising dollars after he tweeted his support for an antisemitic conspiracy theory were trying to “blackmail” him.

Here’s how the situation is playing out for different companies:

Walmart Joins Advertisers Leaving X

Retail giant Walmart (WMT) became the latest corporation to pull its advertising money from X on Friday, Reuters reported, in a growing movement that threatens the future of the platform.

Apple (AAPL), Warner Brothers (WBD), Comcast (CMCSA), and IBM (IBM) are among other firms draining the platform of its lifeblood.

Brands began distancing themselves from X after Musk took over last year, but the exodus intensified after he tweeted supported an antisemitic conspiracy theory on Nov. 15, for which he has since apologized.

This episode has brought more focus on brand safety, with advertisers becoming more cautious of the content that their ads are displayed in proximity to.

Disney Sees Some Initial Backlash

The Tesla (TSLA) and Space X founder has a loyal fanbase and the division between corporate ad spend and his defense of “free speech” has ramifications for his electric vehicle maker and a host of other firms.

The first company in the firing line is Disney (DIS), which pulled ads from the site after Musk’s November tweets and curtailed posting on its main account.

Users on Musk’s X platform were commenting in droves to say that they have, or will drop, the streaming site. Search interest on Google Trends shows a sharp increase in interest in canceling the company’s Disney+ streaming subscription.

Iger spoke at the same Dealbook event and said his company’s association with Musk or X “was not a positive one for us.”

X’s Monetization Woes May Worsen Significantly

X could lose up to $75 million in revenue by the end of the year as about 200 companies including Airbnb (ABNB), Amazon (AMZN), Coca-Cola (KO) and Microsoft (MSFT) have paused or are considering pulling their ads from the platform, The New York Times reported.

X pegged the figure close to $11 million—but that was before Musk’s now-infamous interview at the event this week.

The platform had already been struggling to generate ad revenues, and Musk hired Linda Yaccarino, former NBCUniversal Head of Advertising, to help overcome that challenge.

Will Ad Dollars Head To Meta, Snap?

The ad revenue fleeing the X app could find a home at other social media firms such as Meta Platforms (META) or Snap Inc. (SNAP) but advertiser concerns around brand safety are not limited to X.

Billionaire investment manager and X investor Bill Ackman lent his support to Musk. In an X post, Ackman said that rival social media sites, such as TikTok, Facebook, and Instagram have “enormous amounts of problematic content, antisemitic and otherwise,” but retain advertiser support.

He also proposed a novel idea for ownership of the site, saying “Perhaps someday the ownership of X should be distributed to each American, one share for each,” to protect its goal of free speech.

Some Ad-Tech Companies May Benefit

With brand safety in the spotlight, advertising technology companies that offer those services could stand to benefit. Companies such as Integrated Ad Science (IAS) and DoubleVerify (DV) could find themselves in demand.

Investors are taking those cues as well. IAS shares were up roughly 2.5% for the week and 63% since the start of the year. DoubleVerify shares gained about 4.4% in the week and rose nearly 53.4% year-to-date.