Malcolm Owen
Elon Musk insists that the $44 billion deal for Twitter cannot continue — or the price should be lowered — unless Twitter proves claims that fake users are less than 5% of all accounts.
After Musk temporarily put the deal to buy Twitter on hold on Friday over Twitter's claim that fewer than 5% of its accounts on the service are fake, relations between the different parties haven't improved over the following days.
On Monday, Twitter CEO Parag Agrawal tweeted a thread about Twitter spam, seemingly in response to Musk's assurance that the 5% figure was realistically closer to 20%. In the thread, Agrawal explained about the complexities of catching spam and reviewing it, as well as an assertion that Twitter's "actual internal estimates for the last four quarters were all well under 5%," using internal data.
Agrawal then disputes the ability for Musk or his team to determine how much spam there is on the service. "Unfortunately, we don't believe that this specific estimation can be performed externally, given the critical need to use both public and private information (which we can't share,)" writes the CEO.
An independent study claims that fake users as a percentage of all users could be nearly 20%. Political accounts, including Musk's own have been said to exceed 40%.
He adds that Twitter "shared an overview of the estimation process with Elon a week ago," and looked forward to "continuing the conversation with him."
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
— Elon Musk (@elonmusk) May 17, 2022
My offer was based on Twitter's SEC filings being accurate.
Yesterday, Twitter's CEO publicly refused to show proof of
This deal cannot move forward until he does.
On Tuesday, Musk tweeted that the 20% spam account figure "could be much higher" than the conservative estimate determined. Musk continued that his offer was based on "Twitter's SEC filings being accurate."
Agrawal's tweet thread is brought up by Musk, who said the CEO "publicly refused to show proof of
In filing a preliminary proxy statement about the acquisition, Twitter says that it "is committed to completing the transaction on the agreed price and terms as promptly as practicable."
At a seminar on Monday, Musk commented on the fake user problem.
"I'm thinking about bots on Twitter," said Musk. "Apparently quantifying them is as unknowable as the human soul."
Musk told the audience there was probably four or five times the number of bots on Twitter compared to what Twitter says there are, with 20% being the lowest estimate.
He went on to say that a renegotiation at a lower price wasn't "out of the question".
It's not clear why Musk failed to do due diligence of the service before offering to buy, which should have included an accurate count of fake users. It's also not clear why the SEC hasn't said anything about Musk's Tweets or remarks at Monday's seminar, both of which are fairly textbook examples of stock manipulation — which they have cited him for before.
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47 Comments
I thought Felon Musk was going to put an end to the fake users himself?
Just another grift.
If the deal falls through I think the SEC would have a good case of fraud to bring against Musk. Looking like this was all theatre from the get-go.
Would anyone really be surprised if >50% of Twitter accounts were not "fake" "spam" "bots" "non-human"?
He didnt expect the Tesla stock hit, so his $44 billion in funding suddenly represented a majority of his on-paper fortune.
Hopefully Twitter holds out for the $1 billion payment from him if he does back out.One of the most immediate fixes social media could implement is human-backed accounts.
How are fraudulent SEC filings by Twitter, somehow Musk's fault? All Musk did was read the forms, and calculate a value based on the reported number of Active Subscribers.
Seems that Twitter is the one that not only misrepresented themselves, but also committed fraud to both stockholders, as well as advertisers. I would expect to see a class action lawsuit from stockholders, as well as advertisers, who made business decisions, based upon what is supposed to be accurate data.
Secondly, fraud in vitiates EVERYTHING. If you agree to buy a house that you are told in writing, is 4,000 sq-ft. You have the architectural drawings on file (analogy with the SEC filings), you have the Realtor's Contract in hand - and it all says 4,000 sq-ft; but you find out that it's actually much less than 4,000 sq-ft - how is it that somehow this is your fault? How would it be that you are still required to purchase a contract, that was presented to you, fraudulently? How would you be liable for the Down Payment you made?
Simply said - you would not. You would be entitled to all of your money back; and the seller would be on the hook for your time, costs and efforts. The Realtor would likely be investigated for a breach of ethics (if they exist). Twitter is the one who lied, Twitter is the one that filed false SEC claims. Seems pretty clear cut.