Elon Musk said he would not move forward with the $ 44 billion acquisition of Twitter until he received more information about fake accounts on the platform, but he met with the company’s management for three days to discuss its business before publicly announcing its application under the new securities statement.
A statement to the Securities and Exchange Commission did not specify what was discussed and whether Musk expressed his concern about bots during the meetings.
In late March and early April, Musk held discussions with co-founder and former Twitter CEO Jack Dorsey, current CEO Parag Agraval, Twitter CEO Brett Taylor and board member Egan Durban, and other executives.
The meetings took place after Musk invested in Twitter and before the April 14 announcement that he was making an official bid for the company. The Twitter board eventually agreed to sell Mask for $ 44 billion late last month, but the future of the deal remains uncertain as Tesla’s CEO said the acquisition would not move until he had a clearer idea of the number of fake accounts on the platform. .
Investors are dropping Twitter shares for fear that Musk will abandon the deal to buy Twitter at an agreed price of $ 54.20 per share. Shares of Twitter have given up all their earnings since the billionaire first revealed his 9% stake in the company last month. Shares rose more than 2% on Tuesday to $ 38.54, below the closing price of $ 39.31 on April 1, the last trading session before Musk revealed his minority stake.
On Tuesday, Musk doubled his belief that the Twitter deal “can’t move forward” until the company proves that bots make up less than 5% of the platform’s users. Bots are automated accounts that can be both useful and infamous. Neither Musk nor Twitter have said exactly how they identify bots or fake accounts.
“My suggestion was based on the accuracy of SEC documents on Twitter,” Musk wrote on Twitter early Tuesday morning. “Yesterday, the CEO of Twitter publicly refused to show evidence <5%. This deal cannot move forward until he does."
Since the IPO in 2013, in financial documents, the company has estimated that fake accounts or spam accounts account for less than 5% of monthly users. In its 2018 annual report, Twitter added that this figure also applies to monetized daily active users (mDAUs).
The company, which had 229 million mDAUs as of last quarter, says “the actual number of fake or spam accounts may be greater than we estimated.”
У a series of tweets on Monday, Agraval told how Twitter determines what percentage of accounts on the platform are fake. He said Twitter cannot publicly disclose specific details of the process because the company relies in part on users ’private information.
Musk responded to one of Agraval’s tweets with smiling smileys and then said in a separate tweet, “So how do advertisers know what they get for their money? This is fundamental to Twitter’s financial health. ”
On Tuesday, at a summit hosted by Chamot Polychapita, Jason Kalakanis, David Sachs and David Friedberg, Musk shared his thoughts on Twitter spam for their All-In podcast.
“It seems unreasonable for Twitter to say that the number of real unique people you see commenting on Twitter every day exceeds 95%,” Musk said. “That’s what they claim. Anyone have that experience? I mean, really?”
However, the CEO of Tesla has not provided any evidence that Twitter’s calculations are unreliable. Chris Kelly, a former privacy director and Facebook’s chief legal counsel, told CNBC in an interview Tuesday that the Twitter bot’s ratings were “pretty well tested.”
Musk said this on Tuesday appreciated that about 20% of Twitter accounts are fake or spam, and he said he is concerned that the number could be even higher.
“Obviously, sometimes there can and should be calls from outside, but Ilona doesn’t seem to have any evidence,” Kelly said.[but] Threshold and the Twitter team provided a lot of evidence of how they do it. If he can’t come up with real evidence here, his allegations are just allegations. “
Earlier, Twitter faced criticism for the accuracy of its user metrics. Last September, the social media company said it had agreed to pay $ 809.5 million to settle a collective lawsuit filed in 2016 by shareholders who claimed it had artificially inflated the share price, misleading them about user participation.
Mask has his own ideas on how to count the number of fake, spam and duplicate Twitter accounts. Last week, Musk said on Twitter that he would review “a random sample of 100 @twitter subscribers.”
He later added: “Ignore 1,000 subscribers first and then pick every 10th. I’m open to better ideas. “
Experts in social media, misinformation and statistical analysis told CNBC that this approach would not work and should not serve as “due diligence” for the $ 44 billion acquisition.
– Laura Kolodny of CNBC contributed to this story.
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