Musk excited by Twitter deal despite overprice

OAKLAND, CALIFORNIA: Elon Musk on Wednesday said he was excited about his pending acquisition of Twitter Inc, although he and other investors were overpaying for the social media company.

Musk, the chief executive of Tesla, was answering a question during a call after the electric vehicle maker’s quarterly report. The world’s richest person is pursuing the Twitter purchase after earlier trying to back out of the $44 billion deal.

Musk described Twitter as an asset that had “languished” for a long time. “Myself and the other investors are obviously overpaying for Twitter right now. The long term potential for Twitter in my view is an order of magnitude greater than its current value,” he said.

In the same conference call Musk also spoke optimistically about Tesla.

Tesla, with a market cap now under $700 billion, could be worth more than the combined value of Apple Inc’s $2.3 trillion and oil producer Saudi Aramco’s $2.1 trillion, he said.

Tesla’s automotive revenue was $18.69 billion, an increase of 55 per cent from a year ago. “We remain focused on increasing vehicle production as quickly as possible, by increasing our weekly build rate in Fremont and Shanghai and progressing steadily through the production ramps in Berlin and Texas,” said the company.

During the earnings call, Musk hinted about a possible share buyback. “I can’t emphasise enough that we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see. The factories are running at full speed and we’re delivering every car we make, and keeping operating margins strong,” he told analysts.

The “meaningful buyback” may take place next year, potentially between $5 billion and $10 billion, Musk said.

“I’m of the opinion that we can far exceed Apple’s current market cap. In fact, I see a potential path for Tesla to be worth more than Apple and Saudi Aramco combined. That doesn’t mean it will happen or will be easy,” he noted.

Musk has been trying to raise cash to fund the Twitter purchase, and some experts say he may need to sell about $3 billion more in stock after the Tesla quarterly report to do so.

A Delaware judge ordered a pause to Twitter Inc’s lawsuit against Elon Musk, giving the billionaire until Oct 28 to close the deal.

Tesla investors feared that the billionaire may sell more Tesla stocks to finance the deal and may be spreading himself too thin, pulling down shares.

Musk, CEO of SpaceX, and Neuralink and Boring Company, said on Wednesday he does not have a current plan to combine them with Twitter under one umbrella.

Tesla doubles net income to $3.3 bn in Q3, automotive sales up 55%

Tesla has reported $3.3 billion in net income for the third quarter (Q3), more than double from a year ago, and its automotive revenue jumped 55 per cent from the same period last year.

In a letter to the shareholders, the electric car-maker said late on Wednesday the third quarter was another strong quarter with record revenue, operating profit, and free cash flow.