Elon Musk says Twitter deal ‘on hold’ after spam/fake account report

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Musk said his deal to buy the social network is on hold after it was reported that less than 5 percent of its users were fake. A link to a May 2nd report on the company's filing was sent by the CEO of the company.

The deal was temporarily on hold pending details on how much fake accounts actually represent.

The relevant section of the filing is below. The real number of false accounts could be higher than the estimates it has made.

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.

There were problems with math in the past. It said in an earnings report a few weeks ago that it had overcounted its daily users for three years in a row. The company said a technical error led to it counting multiple accounts as active, despite them being tied to a single user, and that this led to it miscounting its user numbers by as much as 1.9 million each quarter.

Musk wants to improve the service by cutting down on the amount of bot armies on the site.

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

— Elon Musk (@elonmusk) May 13, 2022

The latest speedbump to hit Musk is putting the deal on hold. The share price of the social media company plunged 19 percent on the news. The company had initially announced a poison pill to prevent the takeover, before accepting the deal in April.