Elon Musk

Elon Musk said that he would not acquire Twitter for $44 billion until he understood the number of fraudulent accounts on the network. According to a corporate filing from earlier this month, fewer than 5% of the firm’s daily active users (called modus) who brought in money in the first quarter were fraudulent accounts. On the other hand, Musk believes that up to 20% of Twitter accounts are spam or phony and that this figure might be considerably higher. Musk said that Twitter’s SEC filings were complete in an early Tuesday morning tweet. “That is right.”

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Twitter CEO Jack Dorsey openly refused to offer evidence of 5%. “This deal cannot be implemented unless he does.” Twitter said late Tuesday morning that it would buy the company at the agreed-upon price, and it filed a proxy statement with the SEC shortly after Musk expressed his reservations.

Shares of the business slid 2.46 per cent before the market started on Tuesday. When CNBC inquired for a response, a Twitter spokesperson did not immediately answer. Musk resorted to Twitter to express his displeasure with Twitter CEO Parag Agrawal’s lengthy thread against spam on the social network. According to Agrawal, a software engineer, Twitter’s spam estimates are based on a random sampling of thousands of accounts.

He claims that determining the number of spam accounts on Twitter is impossible since it requires both public and private information that Twitter does not wish to share with outsiders. He said that it is impossible to determine which accounts are counted as mDAUs on any given day.

What Are Your Thoughts?

According to Jefferies analysts, Musk seems to be attempting to lower the price due to the current market sell-off. According to analysts Brent Thill and James Heaney in a research report, there are indications that Elon Musk is attempting to cut the offer price. We believe Musk’s probe into how many bogus TWITTER accounts exist is a ploy to drive the share price below $54.20/share. In reality, the NASDAQ COMP is down 25% a year, and Elon Musk is aware that he may be overpaying for the asset.

Elon Musk

Musk’s Research

Musk has said that he and his staff are investigating the number of bogus accounts on the network. However, specialists in social media, disinformation and statistical analysis believe that his proposed method for doing more study is a catastrophe. ON FRIDAY, Tesla CEO Elon Musk tweeted, “To find out, my team will randomly choose 100 followers.” “I want others to do the same thing and see what they discover.” In subsequent tweets, he added, “Choose an account with many followers” and “Ignore the first 1000 followers, then choose every tenth. Better suggestions are welcome.”

Musk further said, without providing evidence, that he picked 100 as the sample size for his study since that is how many Twitter uses in its financial reporting. “Any good random sampling technique is acceptable. It will be revealing if various individuals come up with the same proportion of fraudulent, spam, or duplicate accounts. To obtain a decent picture of how many spam and duplicate tweets are on Twitter, I utilized a sample size of 100.
According to Professor Carl T. Bergstrom, sampling 100 followers of anyone’s Twitter account should not be deemed “due diligence” for a $44 billion acquisition of the social network. Bergstrom collaborated on a book to help people understand statistics and avoid being duped by bogus online claims. He also said that a sample size of 100 is less than that used by academics studying similar issues, which might contribute to selection bias. In a tweet, Dustin Moskovitz, a Facebook co-founder, pointed out that Musk’s technique is not random, employs a limited sample size, and might lead to significant errors.

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