Elon Musk said his $44 billion purchase of Twitter Inc. TWTR -8.18% can’t move forward until the company is clearer about how many of its accounts are fake, raising new doubts about its planned acquisition of the social -Media company.
In a tweet early Tuesday, Mr. Musk said the Twitter CEO had refused to provide proof that less than 5% of Twitter accounts were fake. “This deal can’t move forward until he does,” he said.
Mr Musk said his offer was based on the accuracy of documents filed by Twitter with the Securities and Exchange Commission, adding: “20% fake/spam accounts, while four times what Twitter claims could be *much* higher.” “
Mr. Musk’s tweet was in response to an article he made about his own estimate at a conference the day before, estimating that fake users make up at least 20% of all Twitter accounts. Mr Musk’s number roughly matches one in a new report from market research firm SparkToro. The company says it includes in its numbers automated accounts that could be considered legitimate, such as those that post a headline feed.
In a statement Tuesday morning, Twitter said it was “committed to completing the transaction at the agreed price and terms as quickly as possible.” A Twitter spokeswoman declined further comment.
On Monday, Twitter boss Parag Agrawal defended his company’s efforts to fight spam.
“First, let me state the obvious: spam hurts real people’s experience on Twitter and can therefore hurt our business,” Mr Agrawal said in a series of posts on Monday. “As such, we are highly motivated to identify and remove as much spam as possible every day. Anyone who claims otherwise is simply wrong.”
He said Twitter bans more than half a million spam accounts every day and weekly bans millions of accounts suspected of being fake when they can’t be verified by humans.
Elon Musk has maintained close ties with Beijing to build Tesla’s business in China. Now that it’s buying Twitter and focusing on free speech, WSJ examines how China has used the social media platform to spread its views and why this is a cause for concern. Photo illustration: Sharon Shi
Last week, Mr. Musk, the CEO of Tesla Inc., said he would try to verify Twitter’s numbers and said others should do the same. Mr Agrawal suggested that outside estimates of spam accounts were not accurate.
“Unfortunately, given the critical need to use both public and private information, we do not believe this specific estimate can be performed externally.” [which we can’t share]’ Mr Agrawal said on Monday. “Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day,” he added, referring to monetizable daily active users.
Mr Musk responded with a series of tweets, with one shows a poop emoji.
Twitter stock was down more than 2% to around $36.44 in early premarket trade on Tuesday. With that, shares fell further below the $54.20 per share at which Mr. Musk agreed to buy the company and below where shares were trading from Twitter before Mr. Musk’s first announcement that he had taken a stake in the company on April 4th.
Mr Musk’s insistence on the issue of fake accounts has sparked speculation that he might try to renegotiate or exit the purchase – despite having already signed an agreement and refraining from detailed due diligence of the deal. According to securities filings, Mr. Musk and Twitter would each owe the other billion if either walked out of the deal under certain circumstances, but such a clause would not preclude a renegotiation — or lawsuit.
Some outside analysis has found that Twitter may have more fake accounts than it’s letting on — though they use a different methodology than Twitter and include accounts the company excludes from its estimates.
SparkToro says its analysis of a representative sample of active Twitter accounts found that 19% fit a conservative definition of fake or spam accounts.
But SparkToro states that its definition of fake accounts includes all accounts that don’t regularly have a human composing their tweets, which are common on Twitter to send information such as news updates, inspirational quotes, and stock price changes. Twitter provides developers with tools to create automated bots.
– Allison Prang contributed to this article.
write to Thomas Derpinghaus at [email protected] and Sam Schechner at [email protected]
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