How Elon Musk's Twitter blue tick cost firms billions of dollars|Teji Mandi Explains

After Elon Musk took over Twitter, many things happened, like massive layoffs, top executives resigning, and fake verified accounts coming to life. The tweets by these fake verified accounts sparked panic for many companies as they lost billions.

Teji MandiUpdated: Friday, November 18, 2022, 03:37 PM IST
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How Twitter's Blue Tick Costed Firms Billions of Dollars | FPJ

Twitter’s blue tick proved disastrous as many users created fake accounts of companies, because of which a few companies had to face losses. Let’s explore more in the story.

Businesses join social media to establish credibility among their users and prospective customers. When a company posts updates from their verified social media platform, we consider it authentic.

• But imagine a fine day when Pepsi tweets - Coke is better.

• A giant pharmaceutical company tweets - Insulin is free!

• And Nestlé tweets - We steal your water and sell it back to you.

All of this is hard to believe, but it has happened. Let’s find out the story behind it.

What’s Happening?

After Elon Musk took over Twitter, many things happened, like massive layoffs, top executives resigning, and fake verified accounts coming to life.

Now, Twitter earns revenue from advertising. But Elon Musk thought of monetising by selling a blue tick subscription by charging a monthly fee of $8.

After the new Twitter blue tick subscription was live, it was noticed that people had started impersonating famous personalities and companies and posted tweets under their names. All this happened because everyone could get verified by paying $8 per month. Apart from this, a few companies saw huge losses because of fake Twitter accounts.

Fake Tweet Sparked Panic for Companies

Eli Lilly

Eli Lilly and Company is a renowned American pharmaceutical company. They were one of the first pharmaceutical companies to mass-produce insulin.

In the past few years, the company has increased the cost of insulin, because of which they were heavily criticised. But, as the company claimed it was not profiting from those increases, everything went back to normal.

But then, suddenly, a tweet popped up from Eli Lilly and Co that said, “We are excited to announce insulin is free now!”

Tweet by Eli Lilly fake account

Tweet by Eli Lilly fake account | Twitter - Rafael Shimunov is on Mastodon

Later on, it was clear that the news was fake.

But the damage was done! The company's stock price slipped from $368 a share to $346, with its market cap losing an estimated $15 billion on 11th November 2022.

Lockheed Martin

Something similar happened with Lockheed Martin as well. It is a prominent weapons manufacturer in the US. A fake account claiming Lockheed Martin said that they are halting weapon sales to the United States, Saudi Arabia, and Israel awaiting a further investigation into their record of human rights abuses.

Tweet by Lockheed Martin fake account

Tweet by Lockheed Martin fake account | Tweet - Steve Herman

After this tweet, the company’s stock crashed by 5.5% and lost close to $7 billion in market cap.

What’s Next?

Because of such loopholes, Twitter is losing money. After Eli Lilly's stock plunged, it ordered a stop on all Twitter ad campaigns and other activities. Moreover, people are also moving out of Twitter because of uncertain situations. Elon Musk recently said that Twitter is losing $4 million daily.

Twitter is going through a challenging phase. Hence, Elon Musk tweeted, - We will keep what works and change what doesn't.

As users, we must stay aware of what is happening around us and not fall for news and updates posted by fake accounts.

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