Twitter Shares Dive as Elon Musk Puts Purchase Deal on Hold

Elon Musk tweeted that his $44 billion deal to acquire Twitter is now on hold while he analyzes the company’s estimates regarding fake accounts and the number of its monetizable daily active users. Twitter shares dropped 18% when the news was announced.

The social media platform reported fake accounts or spam bots comprised less than 5 percent of its 226 million monetizable daily active users. Musk said he wants to see the company’s calculations.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted.

The filing notes that calculations about the number of faker accounts are an “estimate,” and that the real number “could be higher than we have estimated.”

“We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represents the average of false or spam accounts in the samples during each monthly analysis period during the quarter. In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated,” according to the filing.

Twitter overstated its daily users by as much as 1.9 million each quarter for three consecutive years in an earnings report, according to media reports on Friday (May 13). The company pointed to a technical error that counted multiple accounts tied to the same user as active. 

See also: Twitter Fires 2 GMs, Freezes Hiring in Wake of Musk Deal

When Musk announced plans to buy Twitter, he made it a priority to slash fake accounts and spam bots from the platform.

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