Elon Musk's next headache after Tesla's earnings flop could be users ditching X over Israel-Hamas misinformation, Nobel economist Paul Krugman says
- Elon Musk, already reeling after Tesla's earnings flop, could see X users ditch his platform.
- Israel-Hamas misinformation might be a "tipping point" for the social-media site, Paul Krugman says.
Elon Musk is already reeling after Tesla's earnings miss slashed its stock price by 9% on Thursday. Things could go from bad to worse for the tech billionaire, as the spread of misinformation about the war between Israel and Hamas could drive people away from his X platform, according to Paul Krugman.
The Nobel laureate said Thursday that he believes users will ditch the social-media website for rivals like Threads and Bluesky, with Musk having already been called out by the European Union for allowing false information about the conflict to spread.
"The crisis in the Middle East has provided the first big test of the Muskified platform, and my perception, shared by many, is that it is failing that test with flying colors," Krugman wrote in an op-ed for the New York Times. "So is this the tipping point? I don't have hard data, but my sense is that it may well be."
"More and more people I follow are posting useful material to other platforms, mainly Threads and Bluesky," he added, referring to the social-media sites launched by Meta Platforms and Twitter founder Jack Dorsey respectively.
Musk's early changes to X have included gutting its trust and safety teams, changing verification processes, and introducing monetized content. Those tweaks have likely made it easier to spread fake news about the Israel-Hamas war on the platform, misinformation expert Sander van der Linden told Insider earlier this month.
"The experience has gotten steadily worse," Krugman wrote Thursday, citing people being able to pay for blue ticks and a rampant rise in anti-vaccine and anti-Semitic posts on X as factors that have undermined the platform.
Tesla's third-quarter earnings fell short of Wall Street's expectations on Thursday, and Musk struck an unusually pessimistic tone during what one analyst dubbed a "mini disaster" of an earnings call. The world's richest man ticked off a long list of worries about the US economy, and warned it would be difficult to scale up production of the carmaker's long-awaited Cybertruck.
Spooked investors wiped around $75 billion off of Tesla's market capitalization in a single day. The electric-vehicle maker was valued at less than $700 billion as of Thursday's close, down from over $1 trillion as recently as 18 months ago.