The issue is that people are criticizing X for allowing hate speech.

Musk and X are in control of what content they allow on their site. If they choose to let people post pro-Nazi posts, and they don't put into place a control of which ads go where, then this is the consequence.

Companies will not want to put ads on his site, for fear of their ads being placed next to this type of content. They won't want to put ads on X at all, just because they disagree with his business practices of allowing what is considered hate speech.

Does the company have the right to want to protect their image?

It all boils down to people being against what they view as anti-Semitism and pro-Nazism and pulling their ads from a site that is not controlling that sort of content on their site.

Musk thinks he can have his cake and eat it, too, in this situation. He wants to have a "completely free speech" site (which if he gets his wish will quickly look like some of the chans, and run wild with pro-Nazi, antiJewish, anti Muslim, anti gay, anti woman posts) and he wants to keep his ad revenue.

But considering how woke most companies are now, that's just not going to happen.

And no matter what atomic bomb lawsuits or whatever he calls them, in the end he's not going to be able to force companies to advertise with him.

He's not going to win this lawsuit. He's not going to win the woke war. He can't bully people into advertising with him if they don't want to.