Billionaire investor Elon Musk’s privately held social media entity X is adding more companies to its lawsuit that alleges a coalition between defendants to boycott advertising on its platform. According to a court filing submitted on Saturday, February 1, X added Lego, Nestle (NSRGY), Abbott Laboratories (ABT), Colgate-Palmolive (CL), Pinterest (PINS), Tyson Foods (TSN), and Shell International (SHEL) to the list of defendants who have abandoned the platform.
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Here’s Why Advertisers Fled from X
X faced an exodus of advertisers from its platform in 2023 after Musk supported an antisemitic post. Following this, X filed a lawsuit against the companies and advertising trade group World Federation of Advertisers, accusing them of violating antitrust laws and conspiring to collectively dislodge billions in advertising revenue from X.
The lawsuit was filed in the federal court of Texas and included an initial list of 18 companies, such as CVS Health (CVS), Mars, and Amazon’s (AMZN) Twitch, among others. X claimed in the lawsuit that advertisers’ exit and reduced ad spending on the platform severely impacted its financial health.
Concerns over whether Twitter (now X) would comply with brand safety standards under Musk’s leadership sparked an exit of media companies from the platform in late 2022. Following Musk’s acquisition of Twitter, the social media platform has undergone several notable changes related to content moderation, which has drawn huge criticism.
Musk’s Trump Ties Draw Advertisers Again
Notably, Musk’s recent closeness with President Donald Trump has changed the political landscape for corporations. CEOs and founders are trying to remediate soured ties with Musk. Amazon, for sure, has chosen to act swiftly, with reports suggesting last week that the e-commerce behemoth has boosted ad spend on Musk’s platform. Similarly, Unilever’s name as an initial defendant was also dropped from X’s lawsuit following an agreement between the two parties.
Interestingly, Meta Platforms (META) also chose to follow X’s moderation technique by ending the fact-checking model and instating the Community Notes program. This bold step taken recently by founder-CEO Mark Zuckerberg has caught everyone’s attention, implying a way to mend ties with Musk.
Which Is the Best Social Media Platform?
While X is privately held, investors can invest in one of the listed social media companies to gain exposure to the sector. We used TipRanks’ Stock Comparison tool for Top Social Media Stocks to understand their current performance.
