May 31, 2023


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Elon Musk can't walk away from a billion dollar Twitter deal

Elon Musk says Twitter deal ‘can’t go ahead’ until he’s clear about bot numbers

Musk’s plan to buy Twitter has alarmed policymakers around the world.

Joe Skipper | Reuters

Elon Musk said his purchase is worth $44 billion Twitter He won’t move forward until he has more clarity on the number of fake accounts.

Twitter estimated in a filing earlier this month that less than 5% of monetized daily active users during the first quarter were bots or spam accounts.

But Musk estimates that about 20% of accounts on Twitter are fake or spam and he’s worried the number could be higher.

“Based my presentation on the accuracy of Twitter’s SEC filings,” Musk tweeted early Tuesday morning. “Yesterday, the CEO of Twitter publicly declined to show proof of <5%. Can't move forward with this deal until he does."

Twitter shares fell 2.22% in pre-market trading on Tuesday. A Twitter spokesperson did not immediately respond to CNBC’s request for comment.

Musk said his team is conducting its own analysis on the number of fake accounts on the platform, but experts in social media, disinformation and statistical analysis say his proposed approach for further analysis is pitiful minor.

“To find out the answer, my team will do a random sample of 100 Twitter followers,” Mask tweeted on Friday. “I invite others to repeat the same process and see what they discover.”

He explained his methodology in subsequent tweets, adding, “Choose any account with a lot of followers,” and “Discard the first 1,000 followers, then pick every ten. I’m open to better ideas.”

Musk also said, without providing evidence, that he chose 100 as the sample size number for his study because that’s the number Twitter uses to calculate the numbers in their earnings reports.

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“Any reasonable random sampling is OK. If several people independently get similar results in percentage of fake/fake/duplicate accounts, that would be obvious. I chose 100 as the number for the sample size, because that’s what Twitter uses for the account <5 % is fake/spam/duplicate.”

Carl T. said, “For the acquisition of $44 billion.

He said a sample size of 100 is much smaller than normal for social media researchers studying similar issues and could lead to selection bias.

Facebook Co-founder Dustin Moskovitz studied the issue via his own Twitter account, noting that Musk’s approach isn’t actually random, uses a very small sample, and leaves room for serious mistakes.

Additional reporting by CNBC’s Laura Kolodny.