Elon Musk Suggests Twitter Buyout Offer May Be Reduced Based on Bots

Tesla and SpaceX CEO Elon Musk suggested recently that his $44 billion Twitter buyout offer may be cut in proportion to the real number of bots on the platform. Musk continues to express doubt about the platform’s outlandish claims of bots making up only five percent of its userbase.

Fox Business reports that Tesla and SpaceX CEO Elon Musk recently suggested that his $44 billion acquisition offer of Twitter may be reduced in proportion to the number of bots on the platform. Musk replied to a tweet reading: “If 25% of the users are bots then the Twitter acquisition deal should cost 25% less,” with a single word — “Absolutely.”

Absolutely

— Elon Musk (@elonmusk) May 21, 2022

Musk has recently been skeptical of Twitter’s official numbers on the presence of bots on its platform, tweeting: “I’m worried that Twitter has a disincentive to reduce spam, as it reduces perceived daily users.” In a separate tweet, he added: “They still refuse to explain how they calculate that 5% of daily users are fake/spam! Very suspicious.”

No, they still refuse to explain how they calculate that 5% of daily users are fake/spam! Very suspicious.

— Elon Musk (@elonmusk) May 21, 2022

Musk stated last week that his takeover deal was reliant on transparency relating to spam and bot accounts on Twitter. “20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher. My offer was based on Twitter’s SEC filings being accurate,” Musk stated.

Twitter CEO Parag Agrawal recently tweeted a thread outlining how the company measures spam on the platform, in which he stated: “Our actual internal estimates for the last four quarters were all well under 5% – based on the methodology outlined above. The error margins on our estimates give us confidence in our public statements each quarter.”

Agrawal later added that Twitter doesn’t believe that the number of bot accounts on the platform can be accurately measured, to which Tesla CEO Elon Musk replied with a poop emoji:

💩

— Elon Musk (@elonmusk) May 16, 2022

Breitbart News reporter John Carney outlined why the bot account numbers matter so much to Musk, stating

Twitter said in a recent filing that less than five percent of it what it calls its “monetizable daily active users” were “false or spam accounts” during the first quarter of 2022. There are many in the tech community and on Wall Street who think that’s an absurdly low number and that the real figure is much higher. Twitter gave no indication about how it arrived at the five percent figure, leaving room for doubt. Musk wants to “see the receipts,” as they say.

For the sake of argument, let’s say that Twitter is wrong and that the real number of fake accounts is higher. If the undercount is just a few percentage points, so that the real figure is seven percent, it’s probably not a big deal. What would be a big deal is if bots make up one-third or even half of Twitter’s daily active users.

The legal liabilities that would be associated with underestimating bots on that scale would be enormous. There would be suits from advertisers claiming they had been misled about how many genuine human beings were seeing their accounts. Shareholders would sue saying they had purchased shares at prices pushed artificially high by Twitter’s misstatements. Bondholders could sue alleging that they had been misled. Regulators such as the Securities and Exchange Commission and the Federal Trade Commission might bring lawsuits. Even users might be able to successfully sue Twitter by showing they had expended time and money to grow their reach on the website based on how the idea that they were reaching real people and not a “readership” made up of thirty-percent spam bots.

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