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Elon Musk cited bots when he declared the $US44 billion ($63.5 billion) takeover of Twitter “temporarily on hold”, but not everyone is buying that explanation.
The world’s richest man on Friday tweeted that he was pausing his bid as he awaited further information to confirm whether the social media company’s quarterly estimates of its fake accounts were accurate, sending Twitter shares falling and raising questions about what, exactly, Musk meant.
Indeed, agreed transactions cannot be legally put on hold. Twitter’s lawyers are still working with Musk’s team to complete the deal, said one person familiar with the situation. Musk said he was still “committed to the acquisition”.
Some analysts have interpreted Musk’s manoeuvre as an attempt to force Twitter back to the negotiating table to get a cheaper deal as tech stocks cool, or to find a way to pull out.
“Unless Twitter grossly misreported data – which would be a serious security fraud – this might be a way to either negotiate a lower price or walk away,” says Stefano Bonini, a corporate governance expert at Stevens Institute of Technology.
“At any rate, this shows that we are still quite far from this transaction happening for real.”
Social media companies have long tried to rein in the bogus accounts littering their platforms, bombarding users with unsolicited commercial messages, content or requests.
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Beyond financially motivated spams and scams, fake accounts can boost follower counts, giving the impression of false popularity, or be deployed in disinformation campaigns.
Musk’s tweet suggested concern that Twitter – which has long battled complaints about its bots – has more fake accounts than it discloses. He highlighted a news story citing a recent estimate from the company that “fewer than 5 per cent” of Twitter’s users are fake and spam accounts.
The figure has also appeared in each quarterly earnings filing going back to 2014, although Twitter cautions it is an only an estimate and “could be higher”. It has also been disputed by some researchers: one study from 2017 put the total between 9 per cent and 15 per cent.
Twitter has carried out occasional purges of spam accounts and invested in systems to catch and eradicate others. But it has also dismissed researchers’ estimates and suggested the concern is overblown.
For Musk, who has more than 92 million followers on the platform and is regularly targeted by cryptocurrency scammers, the issue has been a bugbear.
“If I had a dogecoin for every crypto scam I saw, we’d have 100 billion dogecoin,” Musk said last month. He has said that one of his priorities for the platform would be to “defeat the spam bots or die trying”.
Brian Wieser, global president of business intelligence at GroupM, says: “Generally we should be sceptical of user numbers because estimation has to be made and there is no sufficient authentication of whether you have to be human.”
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He notes Twitter has been more encouraging of the use of aliases compared with Meta-owned Facebook, which tries to link profiles to users’ real-world identities. “But it does seem disingenuous to suddenly suggest this is a new thing,” he adds. Source: Financial Review...
