Musk Admits Twitter Purchase Wasn’t ‘Financially Smart’—And He Paid Twice What It's Worth

Topline

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.

Key Facts

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.

Further Reading

Twitter Accepts Elon Musk’s $44 Billion Deal (Forbes)

Twitter Suspends Accounts For Rival Mastodon And Several High-Profile Journalists (Forbes)

Musk Tells Staff Twitter Could Go Bankrupt Without Financial Turnaround, Reports Say (Forbes)

Elon Musk ‘Terminating’ Deal To Buy Twitter—Platform Plans Legal Action (Forbes)

Twitter Will Sell Coveted Blue Checkmark For $8 A Month, Musk Says—But Benefits Still Unclear

(Forbes)