The action continues in another thrilling episode of ‘Tesla Takeover!’ as Elon Musk, just this morning, announced that his supposed purchase of Twitter has been temporarily put on hold, pending additional details from the company to support its claim that spam and fake accounts represent less than 5% of its total user base. Musk later Tweeted this, with many now speculating as to what it could mean. Could it be an attempt made by Musk to back out entirely from the deal?

Bothersome Bots

While the idea that just 5% of all active Twitter users are bots sounds fanciful, Twitter has been reporting the exact same percentage way back in 2013. The truth of the matter is that Twitter doesn’t know. In its own SEC reporting, Twitter states that:

“There are a number of false or spam accounts in existence on our platform. We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the fourth quarter of 2021 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represents the average of false or spam accounts in the samples during each monthly analysis period during the quarter.”

Twitter made this assessment based on a sample of 229 million users, conveniently indicating that exactly 5% of its accounts are fake. It also doesn’t explain why Twitter hasn’t removed these accounts every time it detected them – unless, of course, it has. That would mean that a whole new 5% of accounts have cropped up in their place. So, how many fake accounts does Twitter really have?

Various independent researchers have tried to estimate this. In 2017, researchers from the University of Southern California and Indiana University conducted a study and found out that around 15% of Twitter’s user base were bots rather than people. In 2018, Twitter suspended or removed more than 70 million accounts that it deemed were fake. At the time, Twitter had around 330 million monthly active users, which would suggest that around 20% of its user count are not actually real people. Belying Twitter’s 5% claim are other independent discoveries, such as the one in the wake of the US Election in 2016. In 2019, Wired also reported that bot profiles still dominated political news streams, contributing up to 60% of Tweet activity.

On this note, Twitter’s 5% claim is likely incorrect. So, does that mean that Elon Musk can pull out of the deal entirely if he can prove that Twitter misrepresented this element? It’s possible but highly unlikely. First off, Musk did say that he’s still committed to the deal and has no plans of ‘wussing out’. We’ll have to simply assume that Musk is after clarification and not an escape route. Besides, even if Musk did try to withdraw from his bid, he’d still have it rough, especially since he waived doing detailed due diligence on Twitter’s business to close the deal faster.

The Wrap

As expected, there are various perspectives and even conspiracy theories attempting to ‘define’ Musk’s recent course of action. Given his uncanny personality and way of thinking, no one can really draw a bead as to what goes on in his head. One thing is for sure, hostile takeovers are still primarily political, with economic factors coming in as a close second.

One logical conclusion would be that if Twitter can’t provide him with accurate projections of its current user base, then he can’t properly estimate its future potential. He needs numbers that are as close to the real count as possible to meet the ambitious goals he himself has set.

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Sources 

https://bit.ly/3leKjVL