Musk: Twitter Purchase Was Too Expensive

October 20, 2022 Topic: Elon Musk Region: Americas Blog Brand: Techland Tags: TwitterTeslaSpaceXElon Musk TwitterElon Musk

Musk: Twitter Purchase Was Too Expensive

This week, Musk admitted that he’d be overpaying for the social media company if he ultimately did become its owner.


Elon Musk has spent much of the year fighting over whether he will buy Twitter. First, he moved to buy it, ultimately agreeing to a deal to do so. Then, he sought to get out of that deal, leading to a lawsuit and a court battle scheduled to occur this month. Then, Musk proposed to buy the company under the original agreement, although whether he actually does remains uncertain. 

This week, Musk admitted that he’d be overpaying for the social media company if he ultimately did become its owner.  


The statement came on Tesla’s earnings call Thursday, after an analyst asked Musk if his various companies—Tesla, Space X, Neuralink, and possibly eventually Twitter—might “benefit from operating under a single superstructure, if at all, like a Google Alphabet.”

“It’s not clear to me what the overlap is. It’s not zero, but it’s—I think we’re reaching. I’m not worried about it. I’m not an investor,” Musk said on the call. 

“So, I don’t know. I don’t see obvious sort of some—get combined under an umbrella, at least right now. So, I am excited about the Twitter situation because obviously another part is incredibly well. And I think it’s massive that this sort of languished for a long time but has incredible potential,” Musk added. “Although obviously, myself and the other investors are obviously overpaying for Twitter right now, the long-term potential for Twitter, in my view, is, in order of magnitude, greater than its current value.”

Per Variety, Twitter shares closed at $51.83 per share on Wednesday, giving the company a market cap of around $40 billion. That’s higher than it’s been for most of the time since Musk agreed to the deal but lower than the $54.20 a share that Musk purchased the company for back in April. 

“I’m not doing Twitter for the money,” Musk told the Financial Times this month. “It’s not like I’m trying to buy some yacht and I can’t afford it. I don’t own any boats. But I think it’s important that people have a maximally trusted and inclusive means of exchanging ideas and that it should be as trusted and transparent as possible.”

The Guardian reported earlier this month that the banks that funded Musk’s purchase of Twitter stand to lose a great deal of money, possibly as much as $500 million, if the takeover goes through. Morgan Stanley, Barclays, and Bank of America are among the banks involved with the deal. 

“Higher interest rates tied to efforts to bring down record inflation have led to a deterioration in the credit markets, with returns on risky junk bonds and leveraged loans surging. When the Musk-Twitter deal was financed in April, banks agreed to terms with lower yields than the market would now accept, leading to potential write-downs,” the Guardian said. 

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters