Get Ready for Twitter-Apple Beef! Why Elon Musk Is Fighting Mad.
The turbulence at Twitter is turning into a full-blown storm. Elon Musk has set his sights on attacking a company for allegedly pulling advertising from his platform. Apple (NASDAQ:AAPL) wouldn’t be the first household name to redirect its ad dollars in response to Musk’s new policies. Companies such as General Mills (NYSE:GIS) and Carlsbad Group have moved to stop all advertising on the platform as Musk’s focus on minimally moderated content ignites controversy. However, the new CEO has taken it upon himself to create a Twitter-Apple beef.
Yesterday, he tweeted that the tech giant had “mostly” stopped advertising on Twitter, asking, “Do they hate free speech in America?” Musk tweeted a further question at Apple CEO Tim Cook, who has not responded. Apple so far has issued no statements on its relationship with Twitter, but Musk has offered plenty of updates. A few hours later, he tweeted:
So far, it doesn’t seem Apple has any intention of joining in Musk’s attempted feud. But what does this mean for AAPL stock or for the future of Twitter? Let’s take a closer look.
Inside the Twitter-Apple Beef
As noted, this spat is entirely of Musk’s own making so far. He has a long history of tweeting at prominent public figures with whom he has problems, ranging from business leaders to politicians. Since the aforementioned tweets, he’s issued several more, asking who else the company has censored and advocating for more transparency. Musk is firmly committed to fueling the Twitter-Apple beef, regardless of the cost.
AAPL stock has been falling since yesterday, but investors shouldn’t be fooled. Its declines have much more to do with protests in China over zero-Covid policies that are negatively impacting Apple’s production than with Musk’s Twitter spat. There’s no actual evidence the Silicon Valley pillar has done anything wrong, regardless of Musk’s claims. As InvestorPlace contributor Will Ashworth notes, Apple has given investors plenty of reason to take it seriously in 2023, one of which is Cook’s leadership.
We have only Musk’s word to go on for now when it comes to Apple removing Twitter from its store. That said, it wouldn’t be out of character for Apple to take action against Twitter. In the wake of the Jan. 6 insurrection, it removed far-right platform Parler from the app store on the grounds that it had helped incite violence.
Academic data shows since Musk took over Twitter, hate speech on the platform has increased dramatically. Additionally, a study from NewsGuard has found posts sharing disinformation have received greater Twitter traction under Musk. It would be well within Apple’s rights to remove Twitter from the app store until its content moderation policies are resolved.
What Comes Next
The bad news for Twitter likely won’t stop there. If Apple removed the app from its store, Alphabet’s Google (NASDAQ:GOOG,NASDAQ:GOOGL) would likely follow suit, rendering most smartphone users unable to download Twitter.
In that, we see why the Twitter-Apple beef is a misinformed strategy. Bullying the advertisers who account for most of a platform’s revenue isn’t likely to help Musk make Twitter profitable again.
A report from Media Matters for America found that since he took over the platform, 50 of Twitter’s top 100 advertisers have left it, taking nearly $2 billion in advertising revenue with them. He may soon see it is in his best interest to not alienate the partners who can keep Twitter in business.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.
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