Tesla CEO Elon Musk is now calling on the Securities and Exchange Commission to investigate Twitter’s claims that less than 5% of its daily users are spam and bot accounts.
According to the Analyst, the result of the investigation will be Musk’s basis to either back out of the deal or negotiate down a price, especially now that Twitter’s stock price has plummeted amid a broader market downturn.
On Tuesday, Musk said that the purchase will not move forward until the social media platform shows proof that bots constitute less than five percent of its daily average users.
Here’s what he wrote in a tweet on Tuesday, 17 May:
“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of (fake accounts being) fewer than 5 percent. This deal cannot move forward until he does.”
WLT commented further on the possible fraud Twitter has committed:
Sources are placing that number closer to 20%, but this is still a far cry from Twitter’s reported numbers which indicate that automated bot activity is well under 5%; these are the numbers reportedly mentioned in their S.E.C. filing.
To put the issue into sharper focus, it has been reported that up to 50% of Joe Biden’s followers could potentially be automated bots.
We won’t know just how bad the bot problem is until the company is forced to reveal the numbers as a part of Elon Musk’s ongoing bid to buy the company…
Sources claim that Twitter is dancing around the release of these numbers because it would directly contradict the numbers they reported in their S.E.C. filings….
This could spell enormous legal trouble for the social media platform, as it will be found that they have essentially committed large-scale fraud.
20-90% of their users are potentially fraudulent—they don’t exist. The company has been selling stock and receiving valuations based on the numbers they have been reporting—not the true daily user count.
Aside from a regulatory nightmare, this could potentially spark class-action lawsuits and a bevy of smaller lawsuits from individual investors.
Twitter may not be as fraudulent as Enron, but it may end up becoming the financial scandal of our decade…
On other hand, Musk faces a $1 billion breakup fee, plus the risk of hefty legal expenses from a breach-of-contract lawsuit, if he scraps the deal.
And here’s more on the story:
— TESLARATI (@Teslarati) May 17, 2022
Twitter is going to become the story of Enron.
Lying to shareholders and using false accounting of bot accounts to do so is dangerous territory.
— Candace Owens (@RealCandaceO) May 17, 2022
Insider Paper reported:
Musk stated at a conference in Miami that Twitter could have at least four times the number of fake accounts revealed in its filing.
“You can’t pay the same price for something that is much worse than they claimed,” he said during the event late on Monday.
“Currently what I’m being told is that there’s just no way to know the number of bots. It’s like, as unknowable as the human soul,” he added.
— James Stephenson (@ICannot_Enough) May 17, 2022
‘FAKE NEWS!’ A tool created by the software company SparkToro found that almost half of President Joe Biden’s 22.2 million Twitter followers were “spam bots.” https://t.co/APE7ttIyWj pic.twitter.com/GTn4mpnpwg
— Newsmax (@newsmax) May 17, 2022
Musk said his team would test “a random sample of 100 followers” of the official Twitter account to figure out if its estimate was accurate.