Twitter: Elon Musk Says No Deal Until Company Proves Spam Accounts Are Less Than 5% Of Total Users
Elon Musk has said that his $44 billion Twitter deal will remain paused until the company can prove that spambots account for less than five percent of the total users on the app.
Prior to this, during a tech conference on Monday, Musk had hinted that he could seek a lower price for the company, citing that $44 billion is expensive if 20% of users on the app are fake or spam accounts.
Musk announced the decision in a tweet on Tuesday.
“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5% (spam/fake accounts). This deal cannot move forward until he does,” Musk tweeted.
THE WHISTLER reported that Musk first announced that the deal would be put on hold pending when he’s able to confirm Twitter’s claim that spam and fake accounts indeed represent less than 5% of total users of the microblogging platform.
Following the pause, Twitter shares fell by 17.7% to $37.10 in premarket trading. The stock has fallen further to $36.31 which has raised doubts on whether the Tesla CEO will proceed with the initial offer price of $54.20 per share.
During the conference on Monday, Musk said at this rate, it is possible he could proceed with the deal at a different price
“You can’t pay the same price for something that is much worse than they claimed.
“I mean, it is not out of the question. The more questions I ask, the more my concerns grow. They claim that they have got this complex methodology that only they can understand… It cannot be some deep mystery that is, like, more complex than the human soul or something like that.
Twitter CEO, Parag Agrawal, responded to Musk’s statements on Monday in a lengthy thread where he said that more than 500,000 spam accounts are suspended daily. He maintained that spam accounts on the platform for the last four quarters were “well under 5%,” adding that Twitter’s estimate cannot be reproduced externally due to the use of private data.
“We suspend over half a million spam accounts every day, usually before any of you even see them on Twitter. We also lock millions of accounts each week that we suspect may be spam – if they can’t pass human verification challenges (captchas, phone verification, etc).
“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.
“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.
“The use of private data is particularly important to avoid misclassifying users who are actually real. FirstnameBunchOfNumbers with no profile pic and odd tweets might seem like a bot or spam to you, but behind the scenes, we often see multiple indicators that it’s a real person,” he said.
Twitter agreed to Musk’s offer to acquire the company for $44 billion last month. Musk was excited about the development, saying that he wanted to make Twitter better than ever before by enhancing the product with new features, making the website code open source to increase trust, defeating the spambots, and authenticating all humans.