August 12, 2022

Getty Images | Carol Yepes

Elon Musk has cast more doubt on his willingness to buy Twitter, criticizing the company’s CEO and saying the “deal cannot move forward” until Twitter provides data behind its estimate of spam accounts. Musk also said this week that renegotiating the deal at a lower price is “not out of the question.”

Musk says he thinks at least 20 percent of Twitter accounts are fake or spam, while Twitter said in a Securities and Exchange Commission filing that fewer than 5 percent of monetizable daily active users (mDAUs) are spam or fake. Those numbers are not incompatible, as Musk seems to be talking about all accounts, while Twitter’s 5 percent stat refers to accounts that are logged in and can see ads each day.

But Musk has insisted that Twitter’s data is wrong, and he demanded to see proof and ratcheted up his claims in a tweet on Tuesday:

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.

Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does.

Twitter CEO explained 5 percent estimate

Musk was referring to Twitter CEO Parag Agrawal, who wrote a thread on Monday describing how Twitter made its estimate. “Our estimate is based on multiple human reviews (in replicate) of thousands of accounts, that are sampled at random, consistently over time, from *accounts we count as mDAUs*. We do this every quarter, and we have been doing this for many years.”

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Twitter’s “actual internal estimates for the last four quarters were all well under 5 percent—based on the methodology outlined above. The error margins on our estimates give us confidence in our public statements each quarter,” Agrawal wrote. “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). Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day.”

Agrawal also wrote that Twitter “shared an overview of the estimation process with Elon a week ago and look forward to continuing the conversation with him, and all of you.”

Musk’s ability to get more details from Twitter may be limited because his offer to buy the company waived “business due diligence.” Twitter said one of the reasons its board accepted Musk’s offer is “the likelihood that other potential acquirers would require substantial due diligence, creating a delay and risk to reaching the signing of such a potential transaction.”