Tesla CEO Elon Musk has put the brakes on acquiring the social media platform Twitter, after he and his team found that a whopping number of accounts on the platform are fake.
The owner of Starlink, said that he would not be able to move forward with the deal until the actual number of bots are clarified.
In a tweet, Musk said that his initial offer was based on “Twitter’s SEC filings being accurate,” and that the platform could have at least 20 percent fake accounts, hinting that the number could be much higher, and it has been speculated that it could in fact be close to 90 percent.
Previously claimed by Twitter that there were only around 5 percent of its accounts that were fakes, Twitter CEO Parag Agrawal recently tweeted a thread outlining how the company measures spam on the platform, in which he stated:
“Our actual internal estimates for the last four quarters were all well under 5% – based on the methodology outlined above. The error margins on our estimates give us confidence in our public statements each quarter.”
Agrawal added that Twitter does not believe the numbers that Elon Musk is producing, to which Musk replied with a poop emoji:
“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). Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day.” Stated Agrawal in a tweet.
Musk added to the tweet with poop emoji, stating:
“So how do advertisers know what they’re getting for their money? This is fundamental to the financial health of Twitter.”
Because of his questions surrounding the validity of Twitter’s user accounts, the purchase will be put on the back burner until numbers are confirmed.
Musk said in tweet:
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk said in a tweet. Musk added that he is “still committed to the acquisition.”
Breitbart News reporter John Carney outlined why the bot account numbers matter so much to Musk, stating:
Twitter said in a recent filing that less than five percent of it what it calls its “monetizable daily active users” were “false or spam accounts” during the first quarter of 2022. There are many in the tech community and on Wall Street who think that’s an absurdly low number and that the real figure is much higher. Twitter gave no indication about how it arrived at the five percent figure, leaving room for doubt. Musk wants to “see the receipts,” as they say.
For the sake of argument, let’s say that Twitter is wrong and that the real number of fake accounts is higher. If the undercount is just a few percentage points, so that the real figure is seven percent, it’s probably not a big deal. What would be a big deal is if bots make up one-third or even half of Twitter’s daily active users.
The legal liabilities that would be associated with underestimating bots on that scale would be enormous. There would be suits from advertisers claiming they had been misled about how many genuine human beings were seeing their accounts. Shareholders would sue saying they had purchased shares at prices pushed artificially high by Twitter’s misstatements. Bondholders could sue alleging that they had been misled. Regulators such as the Securities and Exchange Commission and the Federal Trade Commission might bring lawsuits. Even users might be able to successfully sue Twitter by showing they had expended time and money to grow their reach on the website based on how the idea that they were reaching real people and not a “readership” made up of thirty-percent spam bots.