[Global Issues] Elon Musk in a Corner…X Loses Advertising Lawsuit, Stills Rolls After Cannabis-Joke Verdict and Layoffs

Elon Musk, Antitrust Lawsuit in Jeopardy…X (formerly Twitter) falls into free fall

Elon Musk ultimately lost an antitrust lawsuit he filed over a massive advertising boycott triggered after his acquisition of the social media platform X (formerly Twitter). A federal court in the Northern District of Texas dismissed the lawsuit that X brought against the World Federation of Advertisers (WFA) and major global companies. The court ruled that it was not shown that the advertisers’ collective action was intended to wrest control of the market from a competitor, or that it led to a practical monopoly. The court sided with the defendant, citing a Supreme Court precedent stating that losses incurred because a customer chose a competing company are not protected under antitrust laws. Even the legal gamble Musk launched in response to the sharp drop in advertising revenue after the 2022 acquisition failed to change the outcome, and X’s worldwide advertising revenue this year is expected to stay at around $2.19 billion—less than half of the pre-acquisition level.

A legal-risk controversy over a cannabis-slang jab…Restructuring continues

The verdict from the jury in the Northern District of California Federal Court—affirming allegations that intentional stock manipulation was raised during the Twitter acquisition process—also is cornering Elon Musk. Musk’s attorney, Alex Spiro, strongly objected to the jury’s decision to highlight in blue only the portion that reflects the daily stock-loss valuation, ‘$4.20.’ Critics say this was an overt jab at Musk by using ‘420,’ U.S. slang for cannabis, and a failure to uphold the duty to deliver a fair verdict. With legal risks and worsening performance overlapping, X has moved into aggressive restructuring. According to the Wall Street Journal (WSJ), ahead of an IPO for its parent SpaceX and a planned merger with AI startup xAI, X abruptly laid off more than 20 non-technical employees, including the chief marketing officer (CMO). This is widely interpreted as a preemptive survival move by trimming overlapping staff.