Elon Musk suggests lowering Twitter acquisition

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Tesla CEO Elon Musk has suggested that the purchase price of Twitter, which amounts to 44 billion dollars (about 5.7 trillion yen), may be reduced. It was revealed on the 16th. He is skeptical of Twitter’s explanation that fake accounts account for less than 5% of users, and has temporarily suspended the acquisition process until the actual ratio can be scrutinized.

Mr. Musk announced on the 16th that he attended an event held in Florida, USA, through a video conference. The event was allegedly excluded from the press, but according to Bloomberg, Musk said in his speech that at least 20% of Twitter users were fake accounts. “It’s not out of the question,” he said, about lowering the purchase price of Twitter shares, which was agreed at $ 54.20 per share.

According to Twitter’s disclosure to the U.S. securities authorities, the average number of users per day (mDAU) who viewed advertisements that the company emphasizes as a management index increased by 16% from the same period of the previous year in the January-March period of 2022. It is said that there were 229 million people. It is estimated that the number of fake accounts is less than 5%, but if the ratio is higher, the actual number of users will decrease and the corporate value may decrease.

Mr. Musk, who has stated that he will eliminate fake accounts called “bots” that automatically spread posts after the acquisition, said on the 13th that he will temporarily suspend the acquisition procedure until details supporting the company’s explanation are obtained. He has also indicated that he will set out to verify the proportion of fake accounts on Twitter.

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Twitter CEO argues in a series of posts with Elon Musk

Twitter management isn’t fooled by Mr. Musk, who is shaking for more favorable terms. The company’s CEO Parag Agrawal argued against Mr. Musk on the 16th, explaining how he is trying to identify and eliminate fake accounts on his SNS (exchange site) in a series of posts on Twitter.

According to Agrawal, Twitter estimates the percentage of spam and fake accounts quarterly by scrutinizing thousands of randomly selected accounts by multiple people. Whether the target account is spam or not uses the IP address, phone number, location information, etc. that correspond to the address on the Internet.

Mr. Musk has instructed his team to independently aggregate fake accounts included in randomly sampled followers and confirm that they are consistent with Twitter’s estimates. “We don’t think we can do it externally because we need to use both public and private information for estimation,” Agrawal said.

Elon Musk suggests lowering Twitter acquisition
Mr. Musk’s reply to Mr. Agrawal’s continuous posting (from the Twitter screen)

“So how can advertisers know what they’re getting with their money,” Musk said to Agrawal, who detailed his technical efforts in more than 10 consecutive posts. “This is fundamental to Twitter’s financial health,” he replied. He also added a chilling emoticon to the company’s management.

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