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Is Musk a great negotiator? Poetry in motion baby!

Honestly, I'm in awe. Either he forces Twitter to prove up their actual potential advertising base or he'll be able to knock down the stock price and acquisition cost if it turns out they have more "fake" users than they've previously claimed. Brilliant.

Elon Musk Demands Clarity on Twitter Fake Accounts for Deal to Move Forward

Tesla CEO says $44 billion deal can’t progress until the social-media company clarifies how many accounts are fake

By Thomas Derpinghaus and Sam SchechnerFollow

Updated May 17, 2022 9:17 am ET

Elon Musk said his $44 billion purchase of Twitter Inc. TWTR -0.53%▼ can’t move forward until the company is clearer about how many of its accounts are fake, casting fresh doubt on his planned takeover of the social-media company.

Mr. Musk’s latest comments add to questions about whether he is committed to concluding a deal that was struck amid a steep selloff in technology stocks. Last week, he said the deal was “on hold” over concerns about fake accounts on the platform—a problem that has long dogged social media companies.

In a tweet early Tuesday, Mr. Musk said that Twitter’s chief executive had refused to show proof that less than 5% of Twitter’s accounts were fake. “This deal cannot move forward until he does,” he said.

Mr. Musk said his offer was based on Twitter’s filings with the Securities and Exchange Commission being accurate, and added: “20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.”


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Mr. Musk’s tweet was in response to an article covering his own estimate, made at a conference a day earlier, in which he estimated that fake users make up at least 20% of all Twitter accounts. Mr. Musk’s figure roughly matches one in a new report from a market-research firm, SparkToro. The firm says it includes in its figures automated accounts that could be considered legitimate, such as ones that post a feed of news headlines.

In securities filings, Twitter has long estimated that false or spam accounts represent less than 5% of its total number of active users, but has also said that the actual number “could be higher than we have estimated.”

In a statement Tuesday morning, Twitter said it “is committed to completing the transaction on the agreed price and terms as promptly as practicable.” A Twitter spokeswoman declined to comment further.

On Monday, Twitter Chief Executive Parag Agrawal defended his company’s efforts to fight spam.

“First, let me state the obvious: spam harms the experience for real people on Twitter, and therefore can harm our business,” Mr. Agrawal said as part of a series of posts on Monday. “As such, we are strongly incentivized to detect and remove as much spam as we possibly can, every single day. Anyone who suggests otherwise is just wrong.”

He said Twitter suspends more than half a million spam accounts a day and locks millions of accounts suspected of being fake weekly if they can’t be verified by humans.

Elon Musk has cultivated close ties with Beijing to build Tesla’s business in China. Now that he is buying Twitter and focusing on free speech, WSJ looks at how China has used the social-media platform to promote its views, and why that’s raising concerns. Photo Illustration: Sharon Shi

Last week, Mr. Musk, the CEO of Tesla Inc., said he would try to verify Twitter’s numbers and said others should do the same. Mr. Agrawal suggested that external estimates of spam accounts wouldn’t be accurate.

“Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information [which we can’t share],” Mr. Agrawal said Monday. “Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day,” he added, referring to monetizable daily active users.

Mr. Musk responded with a number of tweets, with one showing a poop emoji.

Twitter stock was lower in early pre-market trading Tuesday, down more than 2%, to about $36.44. That took the shares further below the $54.20 a share at which Mr. Musk had agreed to buy the company, and below where Twitter’s shares traded before Mr. Musk first disclosed that he took a stake in the company on April 4.

Mr Musk’s insistence on the issue of fake accounts has raised speculation that he may try to renegotiate or walk away from the purchase—though he has already signed an agreement and waived detailed due diligence on the deal. Mr. Musk and Twitter would each owe the other $1 billion if either walks away from the deal in certain circumstances, according to securities filings, but such a clause wouldn’t preclude a renegotiation—or a lawsuit.

Some outside analyses have found that Twitter may have more fake accounts than it discloses—though they use different methodology than Twitter and include accounts that the company excludes from its estimates.

SparkToro says its analysis of a representative sample of active Twitter accounts found that 19% fit what it calls a conservative definition of fake or spam accounts.

But SparkToro specifies that its definition of fake accounts includes all accounts that don’t regularly have a human composing their tweets, which are common on Twitter for sending such information as news updates, inspirational quotes and stock-price changes. Twitter offers tools for developers to build automated bots.

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