Elon Musk Twitter deal on hold because he wants to verify "spam" accounts number, is that reasonable?

[oali24]

So guys, I'm not sure whether I should put this in tech news, but since I don't want to talk about the elon Musk twitter buyout news specifically but about a specific aspect of it I don't think this post should go in news. I'm wondering if anyone here with a background in website management can explain something, so Elon Musk doesn't believe that twitter only has 5% spam/bot accounts on the platform, ok sure, but assuming Twitter has basic defenses and verification systems against bot account creation wouldn't the number of inauthentic accounts be relatively low? Like is 5% out of the ordinary for these big platforms or do we just have no idea or way to verify this outside of having access to internal company data?

Thanks,

[emosun]

I would assume the majority of accounts are spam , rarely used , or inactive accounts. Like upward of 60 to 70%.

 

From a forum standpoint i think the majority of accounts here are just one and done users so 90% of accounts are inactive or abandon

[Murasaki]

Even with registration requiring a phone number these days, theres ways around it. Defences definitely fall in the basic category.

 

11 minutes ago, emosun said:

I would assume the majority of accounts are spam , rarely used , or inactive accounts. Like upward of 60 to 70%.

 

From a forum standpoint i think the majority of accounts here are just one and done users so 90% of accounts are inactive or abandon

This can be valid for almost any website, its just a natural thing.

[LWM723]

Musk's trying to get out of the deal.

[Levent]

If you are buying a car, wouldnt you wanna know if engine has spun bearings or transmission has a working third gear? Buyer will do their best to not get burned on a deal. So yeah, it is reasonable.

[tikker]

From what I've read it's not about that 5% number per sé, but that that number is lower than what was estimated before through other means.

 

Is it reasonable to go back on this? Depends on what was discussed with respect to the bot aspect. It seems that Twitter only disclosed this <5% number after Elon said he wanted to remove spam bots. From that you could argue he got incomplete information or information was withheld at the time of the deal/negotiations. You could also say he should've done his due diligence with this better, but I don't find it unreasonable to go back to the negotiating table with this.

[Mark Kaine]

he either wants out or cut a better deal...

 

imo the twitter "team" is just stupid,  they should have never accepted the deal, letting musk basically dictate the price...

 

but musk is also stupid, 44bn is a lot just to unban his friend(s) and then drive it to the ground losing it all, he's probably realizing that now... when everyone else saw this coming from a million miles lol...

 

2 hours ago, tikker said:

Is it reasonable to go back on this?

its not, he knew there are bots, even that its "many" before the deal, and I suspect number of bots was actually never part of the deal / contract... if there even is a contract...

 

imo this is just musk being a manbaby as usual... and as above he either wants out or pay significantly less (and twitter will probably accept everything at this point, they just want to make holiday on the Bahamas or something,  they don't care, dorsey was the only one who cared, and even he prefers the holiday life now...)

[oali24]

4 hours ago, emosun said:

I would assume the majority of accounts are spam , rarely used , or inactive accounts. Like upward of 60 to 70%.

 

From a forum standpoint i think the majority of accounts here are just one and done users so 90% of accounts are inactive or abandon

But like specifically spam/bot accounts not inactive accounts, the ones that harm the user experience.

[Needfuldoer]

So you're telling me a platform that let you create as many accounts as you wanted for free, full of...

 

- Firstname Bunchanumbers accounts amplifying political opinions

- Fictional characters

- Corporate accounts

- IoT appliances

- DIY projects that used Twitter as a convenient API to ping their operators with alerts

- Users who keep a separate account for their real name and their online handle

- Abandoned, lost, or forgotten accounts

 

... would have an inflated user count? I am shocked. Shocked!

 

Well not that shocked.

[Vishera]

6 hours ago, oali24 said:

but assuming Twitter has basic defenses and verification systems against bot account creation wouldn't the number of inauthentic accounts be relatively low? Like is 5% out of the ordinary for these big platforms or do we just have no idea or way to verify this outside of having access to internal company data?

Twitter can report the number of accounts that they detected as spam/bots,

But in reality the number is higher than that because they are lacking in protection against bot/spam activity on the platform.

Their detection methods are not effective enough.

[danomicar]

It's very reasonable after making a large purchase for someone to "kick the tires" if you will. 

[GhostRoadieBL]

Totally reasonable, also unlikely trying to get out of the deal, most likely looking to negotiate a better price.

Typically (always) large company deals require the purchaser and company being purchased to open some access to internal documents and information so the deal can be made. Like buying a house, you should get a house inspection to make sure both sides are legit.

Musk would have to prove that he had the money to buy the company and Twitter would have to open their dealings, profit potential, user numbers etc to justify the price Musk was offering. If the value of the company doesn't match or is near the buying price the SEC would be all over the deal asking why a publicly traded company is going to be bought for a huge % more than it's value.

That's likely what caused the hold, Twitter's account numbers are how they get ad revenue, Musk's team will be looking into active vs inactive users, click through rates, all the other metrics which determine what kind of profit they can make. If the deal is based on the assumption that the profit from twitter can be higher to justify the price above the current value the deal would go through.

I'd expect 50%+ of twitter accounts to be inactive or fraudulent based solely on personal experience poking around the site. 5% is laughable considering the number of fake accounts they shut down each day is in the high 6-7 figures. If it's true Musk will end up renegotiating the value and paying alot less for the site.

[Ravendarat]

For 44 billion or whatever it is I say hes well within his rights to make sure ALL the info provided is correct

[Mark Kaine]

3 hours ago, GhostRoadieBL said:

Like buying a house, you should get a house inspection to make sure both sides are legit.

Musk would have to prove that he had the money to buy the company and Twitter would have to open their dealings, profit potential, user numbers etc to justify the price Musk was offering. If the value of the company doesn't match or is near the buying price the SEC would be all over the deal asking why a publicly traded company is going to be bought for a huge % more than it's value.

That's likely what caused the hold, Twitter's account numbers are how they get ad revenue, Musk's team will be looking into active vs inactive users, click through rates, all the other metrics which determine what kind of profit they can make

Well, yes, but you do this before buying the house.  Once you signed the contract its done. Typically. 

 

This is just musk showing that he actually isnt a good or experienced business man at all, because good business people don't sign large, highly  questionable  contracts on a whim...

(but I also don't know if he actually signed a contract,  it sure seems so though) 

 

But i have to add, I don't know what role exactly  "SEC" plays and if its really illegal to pay more or less than what something is worth... where I am from this is certainly not inherently illegal .

 

Basically this "SEC" could bail him out is what you're saying? 

[danomicar]

37 minutes ago, Mark Kaine said:

Well, yes, but you do this before buying the house.  Once you signed the contract its done. Typically. 

 

This is just musk showing that he actually isnt a good or experienced business man at all, because good business people don't sign large, highly  questionable  contracts on a whim...

(but I also don't know if he actually signed a contract,  it sure seems so though) 

 

But i have to add, I don't know what role exactly  "SEC" plays and if its really illegal to pay more or less than what something is worth... where I am from this is certainly not inherently illegal .

 

Basically this "SEC" could bail him out is what you're saying? 

Your argument is flawed. You have to make an offer on the house before you sign the contract through. Between making the offer and signing the contract, you (should) perform the home inspection, which is what Musk is doing. 

[Mark Kaine]

12 minutes ago, danomicar said:

Your argument is flawed.

Well , my argument doesn't seem to be flawed, but the info its based on  might be. Which is also what i was asking,  ie what kind of information we actually have (not much it would seem) 

 

Pretty much all headlines, stories from ~2 weeks ago were "Musk bought twitter". 

 

https://www.google.com/amp/s/www.newyorker.com/news/q-and-a/why-elon-musk-bought-twitter/amp

 

Buying kinda implies signing some sort of contract. 

[Imbadatnames]

13 minutes ago, danomicar said:

Your argument is flawed. You have to make an offer on the house before you sign the contract through. Between making the offer and signing the contract, you (should) perform the home inspection, which is what Musk is doing. 

No Musk is wanting out of the deal. Mainly because the loans he was given are based on Tesla stock which has tanked recently meaning he literally cannot afford it anymore. 

[GhostRoadieBL]

3 hours ago, Mark Kaine said:

Once you signed the contract its done.

This is actually where conditionals and clauses come in, not to go too far down the rabbit hole you can have an accepted bid on a house (or company) conditional to a clear house inspection (or financial assessment of profitability). This means both parties agreed and signed the contract for the deal to go through, it just has those final clauses to be cleared before money comes out of a neutral party holding.

Exactly the same with business deals, I've worked on a few post signature deal packages once the client agrees to go ahead we had to clear out any clauses on the deal and ended up using some of the payment which was still held to fund certain equipment purchases necessary to go ahead with the contract. (that was one of the clauses, to have specific equipment on hand prior to completing the contract)

 

The money for Twitter is based on a bank stating they back the transfer of funds and since we're assuming the contract was signed (besides the misinformation of the media who I guarantee have zero clue if a contract even appeared before the board, not like there's reporters allowed in the board meetings) assuming a contract was presented, there will be clauses for everything from Twitter's profitability, open financial assessments, current asset holdings, leans, future investment strategies and full dossiers on each advertising company twitter has ever used and at least 20 pages more of legalese to determine exactly what Musk's buying. Twitter will also have clauses for board members, staff positions, benefits and company image retention, and most importantly proof of payment being held by a third party with asset leans for non-payment.

Musk bet the farm on this one, if he can get out of it, it won't be because he decided or found out he can't afford it. Doesn't work that way after the 7 figure contract point. Again assuming a signed contract, Musk would be forced to sell everything to cover the payment to twitter by the third party currently holding the stock and assets required for the purchase.

[Mark Kaine]

6 minutes ago, GhostRoadieBL said:

This is actually where conditionals and clauses come in, not to go too far down the rabbit hole you can have an accepted bid on a house (or company) conditional to a clear house inspection (or financial assessment of profitability). This means both parties agreed and signed the contract for the deal to go through, it just has those final clauses to be cleared before money comes out of a neutral party holding.

Exactly the same with business deals, I've worked on a few post signature deal packages once the client agrees to go ahead we had to clear out any clauses on the deal and ended up using some of the payment which was still held to fund certain equipment purchases necessary to go ahead with the contract. (that was one of the clauses, to have specific equipment on hand prior to completing the contract)

hmmm... i see. thanks for that.

 

Well, but tbh this still "feels" like Musk taking advantage of the Twitter board / whatever...

 

Unless he really wants out. But i cant shake off the impression Twitter really wants to sell "at any price/cost" basically... they look so weak in this, oof.

[GhostRoadieBL]

18 minutes ago, Mark Kaine said:

hmmm... i see. thanks for that.

 

Well, but tbh this still "feels" like Musk taking advantage of the Twitter board / whatever...

 

Unless he really wants out. But i cant shake off the impression Twitter really wants to sell "at any price/cost" basically... they look so weak in this, oof.

I had to add a bunch in the edit of my last post, so it may change a few things.

 

After a 20pt drop in share price following a potentially illegal stock dilution only open to board members.... I think twitter's in a tough spot which also seems like a contract is missing signatures rather than sell and buy back with the profit, which has happened to some smaller traded companies. They sold all their shares for a higher price and then bought back enough to retake the board at a higher price assessment after the acquisition.

 

If you are interested, this is a basic SEC contract filing for a small business purchase. Goes through a lot of the clauses you would see on any business transfer

https://www.sec.gov/Archives/edgar/data/793986/000102317510000175/f11300939thstsalecontract.htm

[Mark Kaine]

15 minutes ago, GhostRoadieBL said:

I had to add a bunch in the edit of my last post, so it may change a few things.

 

After a 20pt drop in share price following a potentially illegal stock dilution only open to board members.... I think twitter's in a tough spot which also seems like a contract is missing signatures rather than sell and buy back with the profit, which has happened to some smaller traded companies. They sold all their shares for a higher price and then bought back enough to retake the board at a higher price assessment after the acquisition.

 

 

.

32 minutes ago, GhostRoadieBL said:

Musk bet the farm on this one, if he can get out of it, it won't be because he decided or found out he can't afford it. Doesn't work that way after the 7 figure contract point. Again assuming a signed contract, Musk would be forced to sell everything to cover the payment to twitter by the third party currently holding the stock and assets required for the purchase.

Right (we dont know anything much basically)

 

But he could still be trying to get a lower price? Because thats what it looks like depending on what they negotiated so far. Like, "you dont have as many real users as you claimed, therfore I pay less (20bn)..."

 

This is literally a rabbit hole haha... ugh.

 

 

[Imbadatnames]

12 hours ago, GhostRoadieBL said:

I had to add a bunch in the edit of my last post, so it may change a few things.

 

After a 20pt drop in share price following a potentially illegal stock dilution only open to board members.... I think twitter's in a tough spot which also seems like a contract is missing signatures rather than sell and buy back with the profit, which has happened to some smaller traded companies. They sold all their shares for a higher price and then bought back enough to retake the board at a higher price assessment after the acquisition.

 

If you are interested, this is a basic SEC contract filing for a small business purchase. Goes through a lot of the clauses you would see on any business transfer

https://www.sec.gov/Archives/edgar/data/793986/000102317510000175/f11300939thstsalecontract.htm

Isn’t there a $1B back out clause or something for musk?

[GhostRoadieBL]

28 minutes ago, Imbadatnames said:

Isn’t there a $1B back out clause or something for musk?

I don't know, there's so many sources of potential leaks and a ton of misinformation (kind of fitting for twitter) it's nearly impossible to track and separate sources and rumors.

 

I pulled all my twitter shares after the announcement because it was going to be a circus until the deal clears.

[Kisai]

On 5/14/2022 at 1:53 AM, emosun said:

I would assume the majority of accounts are spam , rarely used , or inactive accounts. Like upward of 60 to 70%.

 

From a forum standpoint i think the majority of accounts here are just one and done users so 90% of accounts are inactive or abandon

 

Nah. That's looking at the wrong side of the equation. It's not "the majority are spam/inactive", it's "the majority of the content posted to twitter isn't exclusive TO twitter"

 

Like this is a problem that also Patreon has, where a lot of accounts exist to interact with just one user, and because the content is posted to more than one platform, those users choose to interact more with that user on the less-annoying platform.

 

On 5/14/2022 at 1:46 AM, oali24 said:

 I'm wondering if anyone here with a background in website management can explain something, so Elon Musk doesn't believe that twitter only has 5% spam/bot accounts on the platform, ok sure, but assuming Twitter has basic defenses and verification systems against bot account creation wouldn't the number of inauthentic accounts be relatively low?

Take a look at the LTT forum. How many people do you see posting to the same forum? Like the news forum, probably has the same 10 people posting on all the threads, and, yet do you see the same 10 people posting on all LTT's videos? No. But how many comments does a LTT video get versus the forum?

 

That's the issue I think is being suggested here. That Twitter has a lot of accounts that exist to post to twitter, not to engage with twitter.

 

Because people sometimes sign up just to interact once and never again, is why you'll often find, on ALL forums, the vast majority of accounts are inactive. Somewhere up to 99.9% of them. If you put some minor obstacles in the way, that will shoo away people who don't want to just comment and never come back. That can be a positive, as it leads to less spam, but it's also a negative because nobody wants to give every website under the sun their email address just to post once.

 

The best solution overall is to "purge-rename" or take the Discord route where every username has a 4-digit hidden number that acts as a way to prevent "name camping", while simultaneously allowing everyone to have the username they actually want. Hiding the email address or "real name" that might otherwise be demanded from the likes of facebook. So you will literately end up with the vast majority of accounts being basically inactive because if purge them, you break the site's databases and various "old threads" and such end up not working correctly because the account no longer exits, or the name gets reused.

 

Like apparently twitter and twitch have policies about never releasing usernames, so if you didn't make an account in the first 3 months the site went live, you're going to be stuck with some stupid username like narutolover69420 rather than the username you want. This is a very important point, because a lot of people want the same username everywhere, and if they can't have it, they just won't use the site. The only way you get an old username is if the original user deletes it and disappears for half a year.

 

 

 

 

 

[wanderingfool2]

On 5/14/2022 at 4:10 PM, Mark Kaine said:

Well, yes, but you do this before buying the house.  Once you signed the contract its done. Typically. 

 

This is just musk showing that he actually isnt a good or experienced business man at all, because good business people don't sign large, highly  questionable  contracts on a whim...

(but I also don't know if he actually signed a contract,  it sure seems so though) 

Uhm, you do realize that the information he is seeking wasn't available publicly until he started the bidding process.  It's actually crazily common to have things signed up and in place, and then the disclosures start happening (which if there is a large enough disclosure then it could potentially break the contract).

 

In this case, it's reported as <5% but he put it on hold because he learned about the fact they used a sample size of 100 users to determine that.

 

On 5/14/2022 at 5:01 PM, Mark Kaine said:

Well , my argument doesn't seem to be flawed, but the info its based on  might be. Which is also what i was asking,  ie what kind of information we actually have (not much it would seem) 

 

Pretty much all headlines, stories from ~2 weeks ago were "Musk bought twitter". 

 

https://www.google.com/amp/s/www.newyorker.com/news/q-and-a/why-elon-musk-bought-twitter/amp

 

Buying kinda implies signing some sort of contract. 

Putting in an offer and having even contracts signed does not mean it's bought, I'm blaming all the media that doesn't seem to have a clue about giant take-overs.  There hasn't even been a shareholder vote, which means if they vote against selling the company then he doesn't get it.  The standard process of purchasing a public billion dollar company is a slow and complicated one where there are many stages where information disclosed could result in the failure of the buyout.

 

On 5/14/2022 at 5:03 PM, Imbadatnames said:

No Musk is wanting out of the deal. Mainly because the loans he was given are based on Tesla stock which has tanked recently meaning he literally cannot afford it anymore. 

I mean he has said that he has the funding.  Realistically he only needs funding for slightly more than half of the $44 billion.  (The $22 billion).  The rest could be other investors in the company.  Your assumption is that he is also getting the loan from his value of Tesla stock; he has enough influence and track record that he may have secured funding based on stake of Twitter itself.  Similar to how Toys "R" Us went private based on a loan on the company itself.  I highly doubt it's about the affordability that is the cause of him wanting to back out.  More so about the fact he keeps getting information that shows just how badly Twitter has been lying to the public.

 

On 5/14/2022 at 7:33 PM, GhostRoadieBL said:

Musk bet the farm on this one, if he can get out of it, it won't be because he decided or found out he can't afford it. Doesn't work that way after the 7 figure contract point. Again assuming a signed contract, Musk would be forced to sell everything to cover the payment to twitter by the third party currently holding the stock and assets required for the purchase.

There is a 1 billion dollar escape clause (where if he can't get the funding or otherwise exits the contract), that itself has at least been made public.

 

On 5/14/2022 at 7:43 PM, Mark Kaine said:

Well, but tbh this still "feels" like Musk taking advantage of the Twitter board / whatever...

It's more likely that the Twitter board realized that not taking the deal would land themselves in a lawsuit.  The fact is they need to allow shareholders to vote on it when the purchase price being proposed was well above what the market value was (and likely would be under their control).

 

 

 

14 hours ago, Kisai said:

Nah. That's looking at the wrong side of the equation. It's not "the majority are spam/inactive", it's "the majority of the content posted to twitter isn't exclusive TO twitter"

 

Like this is a problem that also Patreon has, where a lot of accounts exist to interact with just one user, and because the content is posted to more than one platform, those users choose to interact more with that user on the less-annoying platform.

Either way, we can't trust Twitter's numbers.

 

 

 

Can we all take a collective minute to recognize how stupid Twitter is in basing their <5% spam/fake users on 100 user sample base?  That appears to be what happened, and honestly if it is true I really can't blame Musk for putting things on hold until the actual numbers are verified.