‘Currently is not’: Elon Musk’s shock admission about US$44 billion Twitter purchase

Billionaires

Twitter owner Elon Musk called his purchase of Twitter a poor financial decision—at least for now—in an interview with Fox News host Tucker Carlson that aired Monday night, saying his “timing was terrible” for buying the company, in some of his strongest public comments talking down his $44 billion purchase price.
TOPSHOT-US-TWITTER-MUSK-INTERNET-JUSTICE

This video grab taken from a video posted on the Twitter account of billionaire Tesla chief Elon Musk on October 26, 2022 shows himself carrying a sink as he enters the Twitter headquarters in San Francisco. (Photo by -/Twitter account of Elon Musk/AFP via Getty Images)

Key Facts

Musk told Carlson “it remains to be seen whether this was financially smart—it currently is not.”

The billionaire said Twitter is worth just half its purchase price—seemingly confirming a reported internal memo last month valuing the company at about $20 billion.

Despite his financial critique, Musk did not express regrets about buying Twitter since “some things are priceless,” reiterating his self-proclaimed goal of making Twitter an online haven for free speech—even though he has arbitrarily suspended critics and competitors since taking over the company.

Crucial Quote

“I must be a real genius here. My timing is amazing,” Musk said.

Key Background

Musk has sent drastically mixed signals about Twitter’s financial health. Within a single week in November of last year alone, he publicly predicted at an investment conference that Twitter could become the most valuable company in the world, while he privately told staff the company was on a path to bankruptcy without a significant increase in subscription-based revenue, and said the company was hemorrhaging advertisers.

He claimed last week Twitter is at a “roughly breakeven” point due to sweeping job cuts and the return of some ad revenue, and should have a positive cash flow next quarter—though its true finances are no longer known since Musk took the company private. Musk also made his offer to buy Twitter in the midst of a historic downturn for tech companies. The Nasdaq 100 Technology Sector lost nearly 30% of its value between the time Musk made his offer in April 2022 and shortly before the deal closed in October. Musk during that time took numerous legal steps in an attempt to scrap the deal, before relenting ahead of a trial to force him to buy the company.

What To Watch For

Musk has repeatedly said adding a substantial number of subscribers through the platform’s Twitter Blue service is crucial for its future financial stability. But media-focused news outlet Mashable estimated last month that Twitter only had about 475,000 paying subscribers—less than 0.2% of its daily active users.

One of Musk’s main selling points for Twitter Blue is the addition of a blue “verified” checkmark next to a user’s name—which had been widely considered a status symbol before Musk took over the company. Musk tweeted he plans to strip blue check marks from “legacy verified” accounts—profiles verified before he took over—Thursday, in an apparent attempt to pressure the legacy users into paying to keep their blue checkmarks.

Forbes Valuation

We estimate Musk to be worth $189.2 billion, primarily through substantial stakes he owns in companies like Tesla and SpaceX. Musk is the world’s second-richest person behind French luxury brand mogul Bernard Arnault, who commands an estimated net worth of $236.6 billion.

More from Forbes Australia