Elon Musk calls on SEC to investigate Twitter's spam, fake account estimate

Tesla CEO Elon Musk has suggested that the U.S. Securities and Exchange Commission should investigate whether Twitter's internal estimate that spam and fake accounts make up less than 5% of users on the social media platform is accurate. 

The call to action comes after Musk issued a poll to his more than 97 million Twitter followers asking whether they believe that more than 95% of Twitter users are real.

Representatives for the SEC and Twitter declined to comment. 

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In April, Twitter accepted Musk's $44 billion offer to acquire and take it private at $54.20 per share. However, the deal is temporarily on hold pending details supporting Twitter's calculations on spam and fake accounts. 

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Musk estimated during the All In tech conference in Miami on Monday that fake and spam accounts make up at least 20% of Twitter's users. He later tweeted that the figure "could be *much* higher."

"My offer was based on Twitter's SEC filings being accurate," he added. "Twitter's CEO publicly refused to show proof of <5%. This deal cannot move forward until he does."

In the first quarter of 2022, Twitter's monetizable daily active user (mDAU) base grew 15.9% year over year to 229 million, including 39.6 million daily active users in the U.S. and 189.4 million international daily active users. 

ELON MUSK SENDS POOP EMOJI TO TWITTER CEO IN RESPONSE TO THREAD ON SPAM, FAKE ACCOUNTS

In a lengthy Twitter thread on Monday, Twitter CEO Parag Agrawal said it would be difficult to conduct an external review to determine the percentage of spam and fake accounts on the platform.

"Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information (which we can’t share)," Agrawal explained. "Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day." 

Agrawal reiterated the less than 5% estimate, which he said is calculated based on "multiple human reviews (in replicate) of thousands of accounts, that are sampled at random, consistently over time" from accounts the company counts as mDAUs.

"Each human review is based on Twitter rules that define spam and platform manipulation, and uses both public and private data (eg, IP address, phone number, geolocation, client/browser signatures, what the account does when it’s active…) to make a determination on each account," he added. 

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Musk's deal is currently expected to close in 2022, subject to shareholder and regulatory approval and satisfaction of other customary closing conditions. However, Twitter shares are currently trading well below Musk's offer. 

Under the terms of the deal, Musk would have to pay a $1 billion breakup fee and could be subjected to additional litigation for damages if he walks away. He emphasized during the All In conference that a deal for Twitter at a lower price would not be "out of the question." 

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In addition to vowing to crack down on spam bots, the self-described "free speech absolutist" has expressed interest in open sourcing Twitter's algorithm to improve transparency with the platform's users and said he would overturn former President Donald Trump's ban.