Musk rethinks Twitter deal
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Twitter has miscalculated its number of fake users and accounts in the past and is reluctant to reveal accurate data, Musk says
Tesla founder Elon Musk is rethinking his $44 billion Twitter buyout announcement, claiming the company is keeping key information from him about fake posts and “spam.”
In a letter to the company, Musk states that the current Twitter address is “resisting and frustrating” that release of information, which is a “clear material breach” of the terms of the purchase agreement. Accordingly, Musk says it “reserves all rights thereunder, including the right not to consummate the transaction.”
The South African tycoon claims that Twitter is “actively resisting and frustrating his right to be informed” under the agreement.
Some analysts speculated that Musk is trying to pull out of the deal after the stock fell sharply, making a $44 billion outlay inadvisable.
Last month, Musk had said he would not go ahead with his $44 billion acquisition of Twitter unless the social media giant could prove that bots make up less than 5% of its users.
Twitter CEO Parag Agrawal said the number of fake accounts is less than 5% when daily users are measured, a figure the company previously cited in its quarterly filings.
“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement.”
In Monday’s presentation, Musk stresses that he disagrees with Twitter’s assessment. “Twitter’s latest proposal to simply provide additional details about the company’s own testing methodologies, whether through written materials or verbal explanations, amounts to rejecting Mr. Musk’s requests for data,” the letter contends he.
“Twitter’s effort to characterize it differently is simply an attempt to obfuscate and confuse the issue. Mr. Musk has made it clear that he doesn’t think the company’s lax testing methodologies are adequate, so he should conduct his own analysis. The data that he has requested is necessary to do so, ”continues the note.
The social media company admitted that its estimate of fake or spam users “may not accurately represent the actual number of those accounts” and “may be higher than estimated.”
In its first quarter results on April 28, Twitter acknowledged an error whereby from the first quarter of 2019 to the fourth quarter of 2021 it had overestimated the calculation of its monetizable daily active users by almost two million accounts.
Twitter then explained that with the March 2019 launch of a feature that allowed multiple separate accounts to be linked, “a mistake was made at the time,” such that actions via the primary account caused all linked accounts to be counted. as active users.
”This resulted in an overestimation of mDAU (in English, monetizable daily active users; Twitter users who connected and accessed Twitter on a given day through Twitter.com or Twitter applications that can show ads-) from the first quarter of 2019 to the fourth quarter of 2021”, reported the company, which thus cut its mDAU at the end of 2021 to 214.7 million from the 216.6 million initially estimated.
Specifically, the company had calculated an excess of 1.5 million mDAUs internationally, with 178.8 million instead of the actual 177.3 million, while in the United States it had estimated a total of 37.8 million mDAUs, compared to 37.5 million in the updated figure after correcting the error.
This is the second time Twitter has admitted a similar miscalculation. In 2017 it had overestimated its active users for three years.
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