Mask’s plan to buy Twitter has worried politicians around the world.
Joe Skipper Reuters
Elon Musk has said his $ 44 billion Twitter purchase will not move forward until he has more clarity as to how many accounts are fake.
Twitter estimated in a submission earlier this month that less than 5% of its daily active users who can be monetized – known as mDAU – in the first quarter were bots or spam accounts.
But Musk estimates that about 20% of Twitter accounts are fake or spam accounts, and he is concerned that the number could be even higher.
“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."
Shares of Twitter fell 2.22% on Tuesday in front of the market. A Twitter spokesman did not immediately respond to CNBC’s request for comment.
Musk’s tweet came hours after Parag Agraval, Twitter’s CEO, posted long thread about spam on social media.
Agraval, a software engineer, said spam estimates on Twitter are based on numerous reviews of thousands of accounts that are repeatedly selected at random.
He said external groups could not count the exact number of spam accounts on the platform because it required both public and private information that Twitter could not share.
“Outwardly, it is impossible to find out which accounts are counted as mDAU every day,” he said.
Jefferies analysts said Tuesday that Musk seems to be trying to lower the price due to a recent sell-off in the market.
“Ilona Musk’s recent comments suggest he is trying to negotiate a lower bid price,” wrote stock analyst Brent Till and equity officer James Heaney.
“We believe Musk is using his investigation into the percentage of fake TWTR accounts as an excuse to pay less than $ 54.20 per share. In fact, NASDAQ COMP has fallen 25% since the beginning of the year [year-to-date] and Elon Musk understands that he can overpay for this asset. “
Musk said his team is conducting its own analysis of the number of fake accounts on the platform, but experts on social media, misinformation and statistical analysis say his proposed approach to further analysis is as follows: very scarce.
“To find out, my team will randomly sample 100 subscribers @twitter,” Musk tweeted on Friday. “I invite others to repeat the same process and see what they discover.”
In subsequent tweets, he clarified his methodology, adding: “Choose any account with a large number of subscribers” and “Ignore 1000 subscribers first, and then choose every 10th. I’m open to better ideas. “
Musk also said, without providing evidence, that he chose 100 as the sample number for his study because it is a number that Twitter uses to count numbers in its earnings reports.
“Any reasonable random sampling process will do. If many people independently get similar results for% of fake / spam / duplicate accounts, it will be indicative. I chose 100 as the sample number because that’s what Twitter uses to calculate <5% counterfeit / spam / duplicate. "
Carl T. Bergstrom, a professor at the University of Washington who wrote the book to help people understand the data and avoid false statements online, told CNBC that sampling a hundred subscribers to any single Twitter account should not serve as “due diligence.” “for a $ 44 billion acquisition.
He said the sample size of 100 people is much smaller than the norm for social media researchers studying similar issues, and could lead to biased choices.
Facebook co-founder Dustin Muscovite spoke on the issue through his own Twitter account, noting that Mask’s approach isn’t really random, uses too small a sample and leaves room for massive errors.
– Additional report by Lori Deck from CNBC.