Elon Musk’s $44 billion USD marriage to Twitter appears to be on the rocks. The Tesla and SpaceX CEO said on early Tuesday morning that the deal “cannot move forward” until Twitter CEO Parag Agrawal provides evidence supporting the company’s claims of fake/spam accounts comprising fewer than 5% of its monetizable daily active users (via CNBC).
According to Musk, Agrawal publicly refused to do so on Monday. In a filing from earlier this month, Twitter said that bot accounts, by its calculations, accounted for under 5% of its monetizable daily active users (mDAUs) during Q1. Musk, however, estimates that number is closer to 20% and could even be higher.
“My offer was based on Twitter’s SEC filings being accurate,” Musk said in a tweet. “Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does.”
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
Last week, Musk said the Twitter deal was “temporarily on hold” as he sought to independently verify Twitter’s bot calculations. The celebrity billionaire affirmed that he was “still committed” to acquiring the company, though.
“To find out, my team will do a random sample of 100 followers of @twitter,” Musk said on Friday. “I invite others to repeat the same process and see what they discover.”
While 100 may look like an arbitrary figure, Musk said he picked it “because that is what Twitter uses to calculate <5% fake/spam/duplicate.” However, experts have criticized his methods as being flawed, highly prone to errors, and not actually random.
“Pick any account with a lot of followers,” and “Ignore first 1000 followers, then pick every 10th,” Musk offered as an alternative approach. The electric vehicle magnate also said he is open to suggestions. “I’m open to better ideas.”
Agrawal, on the other hand, said it’s impossible for someone outside Twitter to accurately calculate the number of bot accounts on the platform. Twitter’s spam estimates are based on multiple human reviews of thousands of accounts, he said, and accounts are repeatedly sampled at random over time.
“Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day.”
The finance gurus on Wall Street have theorized this could be a negotiation tactic from Musk to drive down the price of the acquisition as economic markets and business sectors the world over take a downturn. After all, is Twitter really worth Musk’s original offer of $54.20 a share if more than 20% of reported users are inorganic, as opposed to the reported 5%?
Absolutely
— Elon Musk (@elonmusk) May 17, 2022
Musk’s public concerns over fake/spam accounts could also be a precursor to the deal falling through entirely, some experts say.
