Elon Musk has said that his deal to acquire Twitter is “temporarily on hold” after the social network revealed that bogus or spam accounts accounted for fewer than 5% of its 226 million monetizable daily active users. Tesla CEO Elon Musk, who proposed $44 billion for Twitter, tweeted a link to a Reuters story on the company’s filing on May 2nd, adding he wanted to examine the company’s estimates.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted. However, in a subsequent tweet, he stated that he is “still committed to acquisition,” implying that it would happen after Twitter produces adequate details on its numbers.
Twitter’s stock dropped as much as 20% on news of the hold, while Tesla is up 6% as of this writing.
The number of fraudulent or spam accounts calculated by Twitter is an “estimate,” according to a part of the filing, and the true number “may be larger than we have estimated,” it states.
The original piece of Twitter’s filing says, “We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represent the average of false or spam accounts in the samples during each monthly analysis period during the quarter. In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated.”
In the past, Twitter has had issues with calculation. It admitted in an earnings report a few weeks ago that it had overcounted its daily users for three years in a row. According to the corporation, a technological issue caused it to identify numerous accounts as active, despite the fact that they were related to a single user, and this resulted in it miscounting its user numbers by up to 1.9 million per quarter.
Musk has declared reducing “spam and scam bots” and “bot armies” on Twitter, as well as promoting free speech and open-sourcing the platform’s ranking algorithms, a crucial component of his pitch for upgrading the site.
Putting the acquisition on hold is the latest setback in Musk’s bid to take control of the social media network. The corporation first declared a “poison pill” plan to thwart the purchase before ultimately accepting the buyout in late April.