This whole Musk/Twitter takeover thing is surely in the top 5 fumbles of 2022. So, what’s next on the list of this extremely chaotic transaction? Well, this week, team Elon managed a small win, with a judge ruling that Twitter will be required to provide documents from former Twitter Product Chief Kayvon Beykpour as part of team Musk’s evidence-gathering process to try and prove that Twitter willfully mislead investors as to the number of fake accounts on the platform.

Cough It Up

This premise seems to be team Musk’s key sticking point in the deal going ahead as originally planned. For months, Musk has questioned Twitter’s 5% fake accounts claim because, in his personal experience, it’s clearly much higher than that. Which might be true. According to Twitter itself:

“Twitter’s quarterly estimates are based on daily samples of 100 mDAU, combined for a total sample of approximately 9,000 mDAU per quarter.”

Twitter’s sample size of 9k accounts, which is a mere 0.0038% of the platform’s total audience, does seem like only a fractional review size, which likely doesn’t reflect fully indicative results, at least in this respect. Nevertheless, Twitter has argued that even if you disagree with the methodology, that’s immaterial to the takeover moving ahead, because Musk agreed to the original deal, with full disclosures on record and no further parameters for revision.

While Musk and his team continue to gear up to prove that Twitter’s numbers are false, Twitter responds that its official statements and processes have been on record for some time and have been accepted by the SEC in the past, therefore negating Musk’s claims that this would constitute cancellation on the grounds of ‘Material Adverse Effects’. In short, no major change happened since the deal was agreed to, at least for Twitter.

On that note, will anything from Beykpour really change anything? Perhaps, but it’s highly unlikely that the former product chief will be able to provide anything that’ll tip the scales in Musk’s favor. That hasn’t stopped Musk from re-stating his concerns via Tweet, noting today that Twitter’s ‘doing everything possible’ to avoid answering questions about its verification process.

There seems to be a case up for consideration in regards to ad exposure if Musk’s team can definitely prove that the vast majority of Twitter ads are not being seen by real people. So far, Musk and Co’s efforts to prove Twitter wrong have relied on questionable methodology, which will likely fall short in court in this instance.

The Wrap

So, would anything from Beykpour impact this in any way? To be honest, not really. While he could dig up past conversations which could raise more questions about Twitter’s methodologies, Twitter has been open with its reporting, as outlined in its methodology. So again, Musk and Co. might’ve pulled a small win, but preparing for a forced buy might still be the wisest thing to do right now.

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Sources

https://bit.ly/3T4FvC3