Musk met Twitter execs before making offer, unclear if bots were discussing

Elon Musk has said he won’t proceed with his $44 billion Twitter acquisition until he has more details about fake accounts on the platform, but he held three-day meetings with the company’s top to discuss his deal before publicly announcing his offer. according to a new securities filing.

The filing with the Securities and Exchange Commission does not specify what was discussed or whether Musk raised his concerns about the bots during the meetings.

In late March and early April, Musk held talks with Twitter co-founder and former CEO Jack Dorsey, current CEO Parag Agrawal, Twitter CEO Bret Taylor, and board member Egon Durban, among others.

The meetings came after Musk invested in Twitter and before announcing on April 14 that he would be making a formal offer for the company. Twitter’s board of directors finally agreed to sell Musk for $44 billion late last month, but the deal’s future is uncertain as the Tesla CEO said the acquisition would not move forward until he had a clearer sense of the deal Got number of fake accounts on the platform.

Investors have dumped Twitter shares over fears that Musk will abandon the deal to buy Twitter at the agreed price of $54.20 per share. Twitter stock has given up all of its gains since the billionaire first disclosed its 9% stake in the company last month. Shares rose over 2% on Tuesday to $38.54, below the close of $39.31 on April 1, the last trading session before Musk announced his minority stake.

On Tuesday, Musk reiterated his belief that the Twitter deal “cannot go ahead” until the company can demonstrate that bots make up less than 5% of users on the platform. Bots are automated accounts that can be useful or harmful. Neither Musk nor Twitter have said exactly how they define bots or fake accounts.

“My offer was based on Twitter’s SEC filings being accurate.” Musk tweeted early Tuesday morning. “Yesterday the CEO of Twitter publicly refused to provide <5% proof. This deal can't move forward until he does."

Since its IPO in 2013, the company has estimated in financial documents that fake or spam accounts account for less than 5% of monthly users. In its 2018 annual report, Twitter added that the number also applies to its monetizable daily active users (mDAUs).

The company, which had 229 million mDAUs last quarter, says “the actual number of fake or spam accounts may be higher than we estimated.”

In a series of tweets On Monday, Agrawal broke down how Twitter determines what percentage of accounts on the platform are fake. He said Twitter cannot publicly reveal specific details of the process because the company relies in part on private user information.

Musk responded to one of Agrawal’s tweets with a smiling poop emoji, then said in a separate tweet, “So how do advertisers know what they’re getting for their money?” This is fundamental to Twitter’s financial health.”

Musk offered his thoughts on Twitter’s spam problem Tuesday at a summit hosted by Chamath Palihapitiya, Jason Calacanis, David Sacks and David Friedberg for their All-In podcast.

“It seems more than reasonable for Twitter to claim that the number of real, unique people you see commenting on Twitter every day is over 95%,” Musk noted. “That’s what they claim. Anyone have this experience? I mean really?”

Still, the Tesla CEO hasn’t provided any evidence that Twitter’s calculations are unreliable. Chris Kelly, Facebook’s former chief privacy officer and general counsel, told CNBC in an interview on Tuesday that Twitter’s bot estimates are “fairly well-vetted.”

On Tuesday, Musk said he appreciated that around 20% of accounts on Twitter are fake or spam, and he said he was concerned the number could be higher.

“Obviously there could and should be outside challenges at times, but Elon doesn’t seem to have any evidence,” Kelly said.[but] Parag and the Twitter team have provided a lot of evidence of how they do this. Aside from presenting real evidence here, his claims are just claims.”

Twitter has previously been criticized for the accuracy of its user metrics. Last September, the social media company said it agreed to pay $809.5 million to settle a class action lawsuit filed in 2016 by shareholders who argued it artificially inflated its share price, by misleading them about user engagement.

Musk has his own ideas for quantifying the number of fake, spam, and duplicate accounts on Twitter. Musk said in a tweet last week that he would “review a random sample of 100 followers of @twitter.”

He later added, “Ignore 1000 followers first, then pick every 10th. I’m open to better ideas.”

Experts in social media, disinformation and statistical analysis told CNBC that this approach will not work and should not serve as “due diligence” for a $44 billion acquisition.

— CNBC’s Lora Kolodny contributed to this story.

WATCH: Elon Musk appears to have no evidence to support his bot claims, says Facebook’s former privacy officer Musk met Twitter execs before making offer, unclear if bots were discussing

Jane Marczewski

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