Twitter’s spam-account estimate is uncertain
SparkToro’s estimates include inactive accounts that Twitter does not count in its tally of monetizable daily active users, or mDAU. Twitter defines that as “people, organizations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com or Twitter applications that are able to show ads, or paid Twitter products, including subscriptions.”
Twitter’s recent Securities and Exchange Commission filing said, “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 percent of our mDAU during the quarter.” Twitter said this estimate was made using “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.”
Twitter’s filing added that the company is “continually seeking to improve our ability to estimate the total number of spam accounts and eliminate them from the calculation of our mDAU” and that it has “made improvements in our spam detection capabilities that have resulted in the suspension of a large number of spam, malicious automation, and fake accounts.”
“Significant risk that the deal gets repriced lower”
There was already speculation that Musk would try to renegotiate the deal even before his tweets today. Hindenburg Research LLC recently said there is “a significant risk that the deal gets repriced lower.”
“We are supportive of Musk’s efforts to take the company private, and believe he could get it done, but see no reason why he should at these levels,” Hindenburg wrote, according to a Bloomberg article on Monday.
Musk’s $44 billion deal to buy Twitter—which is pending shareholder and regulatory approvals—amounts to $54.20 per share. Twitter’s price was $51.70 at market close on April 25, the day Musk and Twitter’s board announced their deal. The price was down to about $41.50 as of this writing.
A Wall Street Journal analysis said the deal’s completion is “no sure thing” and that Musk could easily walk away from it. “The merger agreement contains a reverse termination fee of $1 billion should Mr. Musk fail to consummate the deal,” the article said. “Such penalties are hardly get-out-of-jail-free cards, especially since a buyer can’t just walk away for no reason. In this case, though, he effectively can: Buried at the end of the agreement is the language about Twitter’s legal remedies. Incredibly, the potential damages are capped at the level of the reverse termination fee.”