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Musk may be using fake Twitter accounts as an excuse — but they're a real proble...

 2 years ago
source link: https://finance.yahoo.com/news/musk-accounts-excuse-twitter-deal-a-huge-problem-160539934.html
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Musk may be using fake Twitter accounts as an excuse — but they're a real problem

Daniel Howley
·Technology Editor
Sat, May 14, 2022, 1:05 AM·4 min read
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Tesla (TSLA) CEO Elon Musk says his planned $44 billion purchase of Twitter (TWTR) is on hold. The reason? He wants to verify Twitter’s claim that spam or bot accounts make up just 5% of its total users rather than significantly more as some suspect.

Musk made his announcement — where else — on Twitter, linking to a Reuters article detailing the disclosure.

But as Variety notes, and Yahoo Finance has confirmed, Twitter has been making the same claim about spam and bot accounts for years in its quarterly 10-Q filings with the Securities and Exchange Commission.

"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," Twitter wrote in its recent 10-Q.

Twitter has used identical language in 10-Qs, with the exception of the year, going back to at least 2014. If Musk wanted Twitter to verify that claim, he could have asked about it before making his offer. It's entirely possible he's just using the bot issue as an excuse to back out of the deal.

Still, spam bot accounts pose a major problem for Twitter. They not only inflate user numbers, but they also provide advertisers with an inaccurate count of how many real people they’re actually reaching.

Despite putting the deal on hold, Musk says he’s still committed to the acquisition. Shares of Twitter, meanwhile, fell more than 9% in early trading on Friday. The S&P 500, which has been hammered in recent days along with the rest of the market, was up nearly 2%.

Musk's sudden decision to put the deal on hold feels particularly out of place because he's pointed to eliminating spam bot accounts and limiting content moderation as his main reasons for buying Twitter.


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