Elon Musk’s Crazy Decision about Canceling Twitter Deal

today a lot of new and crucial information has been revealed about twitter and elon musk was right now we know that the numbers about users of twitter are wrong also the management of the social media company officially responded to elon musk's announcement about halting the twitter deal ceo of the company parag agrawal basically told musk you don't know what you are talking about and this is wrong to this statement elon musk responded that until twitter publicly proves that the platform has less than five percent fake spam accounts that's it the deal is off elon tweeted about this whole situation my offer was based on twitter's sec filings being accurate yesterday twitter's ceo publicly refused to show proof of less than five percent this deal cannot move forward until he does now it's getting ugly there are so many stunning things that happen today so let's explain everything so current twitter ceo parag agrawal answered elon musk's stunning statement by saying that twitter is fighting with spam accounts every day but this is a complicated issue and people that create these accounts get more sophisticated every day so it's not possible to defeat them paragraphs the adversaries their goals and tactics evolve constantly you can't build a set of rules to detect spam today and hope they will still work tomorrow they will not agrawal also mentioned that twitter management has big motivation to deal with this problem but they simply cannot do it he said we are strongly incentivized to detect and remove as much spam as we possibly can every single day anyone who suggests otherwise is just wrong more importantly perrick said that the company has been regulating this problem for many years so this claim that twitter has more than 10 fake accounts is a lie we measure this internally and every quarter we have estimated that less than five percent of reported mdau for the quarter are spam accounts we have been doing this for many years it's interesting to point out that in the tweet where parag explains the method that twitter used to determine fake accounts elon responded saying have you tried just calling them however here's what the ceo of spacex and tesla stated he'd do to figure out how many spam false and duplicate accounts there are on twitter firstly his team will conduct a random survey of 100 twitter followers to find out the ratio of spam bots that exist and he wants others to go through the same procedure and see what they find as well musk elaborated on his process in later tweets saying to choose an account with a large number of followers disregard the first 1 000 followers and then pick every 10th elon then claimed that he chose 100 as the sample size number for his study since it is the same amount that is used by twitter to produce the figures in their financial reports any reasonable random selection procedure according to the billionaire is acceptable it will be significant if several others independently obtain matching percentages of fake accounts he chose 100 as the sample size since according to him that is what twitter uses to determine less than five percent fraudulent accounts however parag agrawal responded and critiqued this approach saying that it won't work specific estimation can be formed externally given the critical need to use both public and private information externally it's not even possible to know which accounts are counted as mda used on any given day said parag of course elon quickly responded saying so how do advertisers know what they're getting for their money this is fundamental to the financial health of twitter and in spite the fact that the world's richest man announced he was halting his bid while awaiting further evidence to determine whether the social media company's quarterly estimates of his troll accounts were correct legally binding transactions cannot be halted this easily it's possible that musk's announcement is an attempt to bring twitter back to the negotiating table to get a cheaper deal or to find a way to pull out according to stefano bonnini a corporate governance specialist unless twitter drastically misreported data which would cause severe security and legal issues this may be a means to negotiate a cheaper fee or walk away musk's post claimed that twitter which has long faced criticism for its bots had more troll accounts than it exposes the statistic has been featured in every quarterly earnings report since 2014. however twitter warns that it is simply an estimate and could be higher some studies have also contested the figure with one study from 2017 putting it between 9 and 15 musk expressed his frustration in a light-hearted tone saying that if he had a deutsche coin for every crypto fraud he saw he would most certainly have 1 billion deutsche coins he has stated that one of his main priorities would be to combat the spam bots issue or die trying in an interview both sentinel founder and ceo christopher bosey stated that his company's analysis indicates that 10 to 15 of twitter accounts are likely inauthentic including imposters spams scam artists duplicates and single purpose hate accounts that typically target and harass individuals and many of those who spread fake news internationally bolt sentinel which is mostly funded through crowdfunding monitors and identifies fake twitter behaviour using a combination of machine learning technologies and teams of human reviewers today the business watches over 2.5 billion twitter accounts largely those of english language users according to bosey twitter's classification of false and spam accounts is unrealistic according to bot sentinel more fraudulent profiles tweet about politics crypto currencies climate change the non-controversial topics like cats and origami now elon musk is no stranger to these types of negotiations of course you all remember paypal and zip2 companies that elon musk sold and made millions of dollars many years ago this then begs the question is musk doing this just to get a new and cheaper deal while the bot problem is not recent one thing has changed since musk initially proposed his solution tech stocks are falling the nasdaq has lost nearly 18 since tesla ceo elon musk launched an attempt to purchase twitter on april the 14th the share price of the social networking site has fallen but it has outperformed the technological index owing mostly to musk's offer according to nathan anderson founder of hindenburg research which is a short seller the tech stock crash provided musk power to recut the contract to purchase twitter at a lesser valuation according to anderson musk looks to be the one with all the cards right now however in light of the current situation the board made a fantastic judgment by immediately agreeing to the acquisition when conditions were far more favorable and analysts believe that they would make a similar sound decision again of course the less money elon will spend on buying twitter the more he will spend on improving it and we all know that elon does not love to spend money inefficiently it's a famous story how he sold all his seven homes and lives in a boxable tiny house which is very comfortable and allows healthy living inside however once a transaction has been agreed upon it is extremely difficult to persuade a board to accept a lesser offer delaware courts which hear the majority of corporate matters have really permitted this to happen unless all parties agree if twitter's board agrees to a lesser price without good reason the company may be sued musk may utilize a condition known as a material adverse change to force twitter to negotiate and accept a lesser bid however the threshold for such a provision is rather high louis vuitton was one such corporation negotiating a price reduction with tiffany during the outbreak as part of its plan the french luxury firm threatened to withdraw from the acquisition saying tiffany violated its contractual agreement by making adjustments during the crisis many believe musk is doing something similar according to the tulane university affiliated professor of corporate law and entrepreneurship unforeseen problems may be used by acquirers to renegotiate the sale price even if musk is not legally allowed to do so a board of directors may believe it is easier to compromise than to sue well that's it for now don't forget to subscribe

Channel: DB Business

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Id: _UIclKF6cNk

Length: 7min 34sec (454 seconds)

Published: Tue May 17 2022