Elon Musk says he's 'obviously overpaying' for Twitter but touts platform's 'incredible potential'
The world's richest man has until Oct. 28 to close his $44B acquisition of the social media giant
Now is the time for Elon Musk to do a Tesla stock buyback: Dan Ives
Wedbush Securities managing director Dan Ives tells 'Varney & Co.' why he tempered Tesla expectations for Q4 and cut his price target.
Elon Musk expressed excitement Wednesday over his pending acquisition of Twitter despite his past efforts to walk away from the $44 billion deal.
The billionaire, who runs Tesla, spoke about the transaction during the electric vehicle maker's conference call with analysts and investors.
"I think it's massive that this sort of languished for a long time, but has an incredible potential," Musk said. "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."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TWTR | NO DATA AVAILABLE | - | - | - |
In April, Musk agreed to acquire the social media giant and take it private for $54.20 per share. In July, he notified Twitter that he was planning to terminate the deal after claiming the company breached its obligations by misrepresenting the number of spam and fake accounts on the platform. Twitter maintains that spam and fake accounts make up less than 5% of its total users.
DAVE PORTNOY SAYS FREE SPEECH HEADED DOWN ‘SLIPPERY SLOPE’ AS MOGULS PURCHASE SOCIAL PLATFORMS
In response, Twitter filed a lawsuit against Musk, accusing him of refusing to honor his obligations under the agreement because "the deal he signed no longer serves his personal interests." Musk proceeded to file a countersuit, which was amended last month to include allegations from whistleblower and former Twitter security chief Peiter "Mudge" Zatko.
Tesla founder Elon Musk attends Offshore Northern Seas 2022 in Stavanger, Norway, on Aug. 29, 2022. | Reuters Photos
Earlier this month, Musk reversed course and said he would follow through on the deal's original terms, pending receipt of the deal's debt financing and provided that the Delaware Court of Chancery stayed Twitter's lawsuit and adjourned a legal trial that was slated for Oct. 17.
The court has given Musk until Oct. 28 to close the deal with Twitter. If the parties are unable to reach an agreement, the trial will be moved to November.
TWITTER FREEZES EMPLOYEE EQUITY AWARD ACCOUNTS: REPORT
Musk has said his decision to buy Twitter could potentially accelerate the creation of X, an "everything app," by three to five years.
X.com was initially an online bank that Musk co-founded in 1999. It went on to merge with software company Confinity Inc. a year later and changed its name to PayPal. Online marketplace eBay bought the electronic payments provider for $1.5 billion in 2002 and, in 2015, PayPal was spun off into an independent company. In 2017, Musk bought the X.com domain name and relaunched the site.
When asked about the possibility of combining his companies under one umbrella, Musk said there's no obvious reason to do so right now. In addition to Tesla, Musk is the founder of SpaceX, Neuralink and the Boring Company.
"It’s not clear to me what the overlap is," he said. "It’s not zero, but it’s… I think we’re reaching."
CLICK HERE TO READ MORE ON FOX BUSINESS
Tesla
Tesla fell in Thursday trading on concern about demand for the company's products in the face of a weakening global economy.
Tesla reported about $21.45 billion in third-quarter revenue, up 27% from the second quarter and 55% from last year's third quarter. The number came in just below estimates. Analysts expected $21.96 billion.
Its profits, meanwhile, were $3.3 billion, a significant increase from the $1.6 billion reported during the same three-month period in 2021. Adjusted earnings were $1.05 per share, toping the estimate of 99 cents.
Tesla
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 339.64 | -2.39 | -0.70% |
Earlier in October, Tesla said its vehicle production for the quarter came in at over 365,000, and its deliveries were over 343,000. Both of those figures were up from the second quarter, when the electric vehicle maker reported producing over 258,000 vehicles and delivering over 254,000.
"We're looking forward to a record-breaking Q4," Musk said. "Knock on wood, it looks like we'll have an epic end of year."
At least six brokerages lowered their price targets on the stock, Reuters reported.