Elon Musk says he is "overpaying" for Twitter but still believes in its incredible potential
No mention of fake accounts, thoughBy Rob Thubron 21 comments
In brief: Elon Musk has shed more light on his takeover of Twitter and the $44 billion it's costing him. The world's richest person praised the platform's incredible potential but admitted that he is "obviously overpaying" for the company.
Speaking during Tesla's earnings call yesterday, Musk addressed the long-running and controversial Twitter deal that was first announced back in April. After the automaker's CEO pulled out of the acquisition over claims that Twitter was being untruthful about how many fake/bot accounts are on the site, Musk eventually agreed to go ahead with the purchase at the original $54.20 per share earlier this month, making the whole deal worth around $44 billion.
Buying Twitter is an accelerant to creating X, the everything app--- Elon Musk (@elonmusk) October 4, 2022
"Although obviously myself and the other investors are obviously overpaying for Twitter right now, the long-term potential for Twitter in my view is an order of magnitude greater its current value," Musk said in a call transcribed by Insider's Tim Levin.
Interestingly, there are reports that Musk and Twitter almost agreed to reduce the acquisition price to $50 per share, but the company is said to have made extra demands as part of the discount that Musk's lawyers wouldn't agree to.
After Twitter sued Musk in response to his pulling out of the deal, the billionaire was critical of the company, accusing it of lying about how many fake accounts populate the platform. He even challenged CEO Parag Agrawal to a public debate on the issue.
"I'm excited about the Twitter situation, because obviously I know their product incredibly well," he said. "And I think it's an asset that has sort of languished for a long time but has incredible potential."
Soon after it was revealed that the Twitter acquisition was back on, Musk asked the presiding judge in the legal proceedings between the two, Kathaleen McCormick, to pause all litigation as he looked to secure funding for the deal. McCormick agreed to the request. Twitter's lawyers weren't happy about it, but the judge did add a caveat: Both sides have until 5 pm on October 28 to complete the transaction, or the trial will commence sometime next month. That deadline is just eight days away.
But Musk's comments suggest the deal is getting ever closer to completion. Another possible sign that the saga might be drawing to a close came on Monday when Twitter froze its staff's ability to access or trade shares on its Equity Award Center. A notice on employees' FAQs read: "This freeze allows Schwab to perform final reconciliation of employee accounts prior to close of the acquisition."