Twitter’s blue tick disaster costs billions as Elon Musk’s major move backfires

Twitter has been engulfed by chaos since Elon Musk took over. Photo / Getty Images

Elon Musk has made headline after headline – for all the wrong reasons – after taking over Twitter for a cool $US44 billion.

The eccentric billionaire, who sparked global outrage after aggressively laying off thousands of employees, has hinted that controversial banned Twitter users like Donald Trump may be able to return to the platform under his watch, and has already seen a slew of celebrities and advertisers flee the platform.

But one move, in particular, has already cost billions – and it could end up being Twitter’s downfall.

Twitter’s blue tick disaster

For years, certain Twitter accounts – such as those belonging to celebrities, public figures and companies – came with a famous blue tick, which indicated that the accounts were genuine and had been verified in order to prevent impersonation.

However, soon after taking over the social media giant, Musk introduced Twitter Blue, which has been described by the platform as a “premium subscription service that elevates quality conversations on Twitter” via an “opt-in, paid monthly subscription that adds a blue check mark to your account and offers early access to select new features, like Edit Tweet”.

In a nutshell, the service granted the once-coveted blue tick to anyone willing to pay $8 a month – which can easily be cancelled at any time – and almost immediately, the chaos began.

Twitter was soon inundated with fake accounts parodying businesses and well-known people such as George W. Bush, Pope Francis and even Musk himself.

And while the majority were simple pranks, many ended up having very real and dire consequences.

Twitter has been flooded with parody accounts. Photo / Twitter

Billions wiped

Among the jokes were a string of accounts impersonating major companies, such as pharmaceutical giant Eli Lilly & Co, Nintendo, Tesla and arms company Lockheed Martin.

And a number of fake tweets from these companies caused a major stock crash.

One of the biggest was caused by a faux Eli Lilly & Co account, which tweeted that: “We are excited to announce insulin is free now”.

The fake tweet caused a share price crash.

That “announcement” immediately saw the firm’s share price tank by a whopping 4.37 per cent, or $US16.08 ($26.40), given most of its revenue is generated by insulin sales.

it cost some hero $8 to evaporate billions in Eli Lilly stock value. Elon accidentally created one of the most cost effective anti capitalist tools in history.

— Robert Evans (The Only Robert Evans) (@IwriteOK) November 11, 2022

That equated to a staggering $US15 billion-odd ($24b) loss to the firm’s market value, and prompted a frantic tweet from the real company account informing the public the first tweet was false.

But Eli Lilly wasn’t the only victim.

It was a similar story for weapons manufacturer Lockheed Martin, which was targeted by a troll account that claimed the firm was pausing weapon sales to the US, Saudi Arabia, and Israel amid “further investigation into their record of human rights abuses”.

Lockheed Martin also lost billions.

That tweet saw the company’s share price plummet by 5.5 per cent, representing a loss of almost $US7 billion ($11b) in market value.

A range of other companies and individuals were also targeted. Photo / Instagram/@sainthoax

Twitter’s frantic scramble

As the chaos unfolded, Twitter was forced to halt the Twitter Blue service as moderators struggled to keep up with the onslaught of fake tweets and accounts.

But whether that’s enough to keep global companies and celebrities on the platform remains to be seen.

Reports have since emerged which indicate Twitter failed to adhere to its own risk evaluation process in the rush to roll out Twitter Blue, and also failed to include adequate content moderation tools.

We also know that around half of Twitter’s workforce has already been let go, indicating these problems are unlikely to be solved any time soon.

At the same time, advertisers have already been fleeing Twitter in the wake of Musk’s takeover, leading many to brand the unfolding situation as the “perfect storm” of conditions that could seriously curtail Twitter’s future, which was already in doubt given it hasn’t turned a profit since 2017, with Musk himself warning it could soon go bankrupt.

And it all adds up to a far less appealing platform for everyday users as well, leading The Verge’s Elizabeth Lopatto to warn of a potential “death spiral” ahead.