Elon Musk previously said economics did not factor into his plans to purchase Twitter.
“This is not a way to sort of make money,” Musk said in April about his offer to buy the platform.
“This is just my strong, intuitive sense that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. I don’t care about the economics at all.”
Musk’s offer was consistent with this statement. He had agreed to purchase Twitter for $44 billion, a price above the social platform’s valuation. Twitter was a shaky investment anyway, given its struggles to monetize users.
There were always better ways to spend $44 billion than on Twitter, suggesting Musk was willing to overlook the business side of the acquisition to create an online medium that valued free speech.
That was then. Now, Musk is thinking economically.
Musk announced last week that he was terminating his purchase of Twitter. He argues that Twitter is in “material breach of multiple provisions” of the purchase agreement and has claimed “false and misleading representations” of its user count.
He alleges that fake/spam accounts could make up around 20 percent of all users, well above the 5 percent that Twitter reported to the U.S. Securities and Exchange.
Musk has decided he does not want to purchase Twitter for $44 billion anymore – whether it’s because of the bots or if that’s only an excuse, we can’t know for sure.
And he might be onto something with the spam accounts. Recently, we documented details that suggested bots do infest Twitter at a much greater rate than previously believed.
Nonetheless, there’s been a plot twist: Musk is contradicting his claim that economics were not a factor in the purchase.
That doesn’t mean Musk lied. It’s more likely he was initially willing to make the questionable investment but has since changed his mind. He slept on it. He had regrets about how far he’d go to create an open platform for free thinking.
Musk could still purchase the platform for a lower price as his termination of the deal seems to be a matter of cost, not interest.
And perhaps that’s his strategy. Maybe #BotGate is a means to both expose Twitter and lower the price in one swing. But if this is his game plan, it would obviously be – at least in large part – economically driven.
In fact, finances will be the leading factor moving forward. Twitter is suing Musk and plans to pursue over $1 billion for a “breakup fee.” As a result, some legal experts predict that Musk and Twitter will eventually discuss another purchase price.
So the question is how much Musk is willing to spend on Twitter. What is the starting price? We know the answer is now less than $44 billion.
It appears that “I don’t care about the economics at all” was not an accurate statement from Musk.