At least 10% of Twitter’s active user accounts are posting spam content, study finds


A new study suggests that about 10 percent of Twitter’s active accounts are posting ‘spam content’, as disputes over the issue threaten to derail Elon Musk’s $44 billion takeover of the social media company.

London-based data analytics firm GlobalData said in a report on Wednesday that its mathematical model found that spam accounts are roughly double the 5 percent share claimed by Twitter.

Musk has been threatening to walk away from his agreement to buy the company unless Twitter backs up its estimate that false or spam accounts comprise less than 5 percent of its user base. 

‘The precise proportion of spam accounts is difficult to compute, as it is almost impossible to confirm the identity of the entity behind a tweet handle,’ said GlobalData senior data scientist Sidharth Kumar.

A new study suggests that about 10 percent of Twitter’s active accounts are posting ‘spam content’, as disputes over the issue threaten to derail Elon Musk’s $44 billion takeover

GlobalData's analysis relied on a statistical model that took into account a number of variables (above) to determine the proportion of spam accounts on Twitter

GlobalData’s analysis relied on a statistical model that took into account a number of variables (above) to determine the proportion of spam accounts on Twitter

‘Additionally, the definition of spam account may differ for everyone. Incessant tweeting of non-original content can be considered spam, but some may choose to see it as a very active user sharing articles/opinions,’ Kumar added.

TIMELINE OF BILLIONAIRE ELON MUSK’S BID TO CONTROL TWITTER

January 31: Musk starts buying shares of Twitter in near-daily installments, amassing a 5% stake in the company by mid-March.

March 26: Musk, who has 80 million Twitter followers and is active on the site, said that he is giving ‘serious thought’ to building an alternative to Twitter, questioning free speech on the platform and whether Twitter is undermining democracy. He also privately reaches out to Twitter board members, including his friend and Twitter co-founder Jack Dorsey.

March 27: After privately informing them of his growing stake in the company, Musk starts conversations with Twitter’s CEO and board members about potentially joining the board. Musk also mentions taking Twitter private or starting a competitor, according to later regulatory filings.

April 4: A regulatory filing reveals that Musk has rapidly become the largest shareholder of Twitter after acquiring a 9% stake, or 73.5 million shares, worth about $3 billion.

April 5: Musk is offered a seat on Twitter’s board on the condition he amass no more than 14.9% of the company’s stock. CEO Parag Agrawal said in a tweet that ‘it became clear to us that he would bring great value to our Board.’

April 11: Twitter CEO Parag Agrawal announces Musk will not be joining the board after all.

April 14: Twitter reveals in a securities filing that Musk has offered to buy the company outright for about $44 billion.

April 15: Twitter’s board unanimously adopts a ‘poison pill’ defense in response to Musk’s proposed offer, attempting to thwart a hostile takeover.

April 21: Musk lines up $46.5 billion in financing to buy Twitter. Twitter board is under pressure to negotiate.

April 25: Musk reaches a deal to buy Twitter for $44 billion and take the company private. The outspoken billionaire has said he wanted to own and privatize Twitter because he thinks it’s not living up to its potential as a platform for free speech.

April 29: Musk sells roughly $8.5 billion worth of shares in Tesla to help fund the purchase of Twitter, according to regulatory filings.

May 5: Musk strengthens his offer to buy Twitter with commitments of more than $7 billion from a diverse group of investors including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.

May 10: In a hint at how he would change Twitter, Musk says he’d reverse Twitter’s ban of former President Donald Trump following the Jan. 6, 2021 insurrection at the U.S. Capitol, calling the ban a ‘morally bad decision’ and ‘foolish in the extreme.’

May 13: Musk said that his plan to buy Twitter is ‘ temporarily on hold.’ Musk said that he needs to pinpoint the number of spam and fake accounts on the social media platform. Shares of Twitter tumble, while shares of Tesla rebound sharply.

June 6: Musk threatens to end his $44 billion agreement to buy Twitter, accusing the company of refusing to give him information about its spam bot accounts.

GlobalData’s analysis relied on a statistical model that took into account a number of variables to determine the proportion of spam accounts. 

The variables included frequency of tweets, deviation in tweet length, and proportion of tweets including hashtags or links, among others.

‘Our estimate is conservative, as we wanted to be sure that we were correctly identifying accounts as spam,’ said Kumar. 

‘It is important to note that this is still an estimation. There is no conclusive way of knowing if a certain account is a bot or spam.’

Musk has speculated publicly that the proportion of bot and spam accounts on Twitter may be as high as 50 percent, and has been threatening to walk away from the deal unless the company can back up its 5 percent claim.

Those threats culminated in a letter from Musk’s lawyers to Twitter on Monday warning he may walk away unless more information is forthcoming.

On Tuesday, people familiar with the matter told Reuters that Musk’s discussions with private equity backers who are key to financing the deal have been put on hold because of the uncertainty.

Musk is on the hook to pay $33.5 billion in cash to fund the deal after arranging debt financing to cover the rest. 

His liquidity is limited given that his wealth, which is pegged by Forbes at $218 billion, is largely tied to the shares of Tesla Inc, the electric car maker he leads.

Musk has been in discussions to arrange $2 billion to $3 billion in preferred equity financing from a group of private equity firms led by Apollo Global Management Inc that would further reduce his cash contribution, according to the sources. 

These conversations are now on hold until there is clarity about the future of the acquisition, one of the sources said.

The pause in financing activities offers the first clear sign that Musk’s threats are interfering with steps that would help complete the deal. 

Twitter has insisted thus far that Musk has been performing his obligation under their contract, including helping to secure regulatory approval for the deal.

Spokespersons for Musk and Twitter did not respond to requests for comment. 

Apollo declined to comment.

Musk sold $8.5 billion worth of Tesla shares in April after he signed his deal to buy Twitter, and it is not clear how much cash he has available to meet his obligation. 

He has raised $7.1 billion from a group of equity co-investors to reduce his contribution. 

Musk also sought to reduce this exposure further by arranging a risky $12.5 billion margin loan tied to the shares of Tesla, but then scrapped it last month.

Preferred equity would pay a fixed dividend from Twitter, in the same way that a bond or a loan pays regular interest but would appreciate in line with the equity value of the company.

The deal uncertainty has also weighed on the plans of banks to get $13 billion of debt they have committed to the acquisition off their books through syndication. 

While still preparing to syndicate the debt, the banks plan to wait until there is clarity on the deal to launch the process, the sources said.

The banks do not believe credit investors will buy into the debt as long as the uncertainty lingers, the sources said. 

The banks have also found Musk’s disparaging public comments about the company unhelpful, and were hoping he would be helping them by now with investor presentations to syndicate the deal, the sources added.

To be sure, the halt of these activities does not affect the commitments made by Musk and the banks to fund the deal. Twitter can take them to court to force them to comply with their financing obligations under the deal contract if they come short.

On Tuesday, people familiar with the matter told Reuters that Musk's discussions with private equity backers who are key to financing the Twitter deal have been put on hold

On Tuesday, people familiar with the matter told Reuters that Musk’s discussions with private equity backers who are key to financing the Twitter deal have been put on hold

The syndication of the debt could emerge as a major issue for the banks were Musk’s dispute with Twitter to escalate in litigation and they were forced by a judge to fund the deal. 

In that scenario, they could struggle to get investors to buy the debt if Musk were unwilling to own the company.

That possibility, however, is seen as remote. 

Most investors are trading Twitter’s stock on the assumption it is far more likely for the company to reach a settlement with Musk or let him walk away, rather than go through protracted litigation.

Musk’s latest dig at Twitter saw him slam its chief legal officer Vijaya Gadde and threaten to torpedo the mega deal.

The Tesla CEO claimed he ‘reserves all rights’ to sink the takeover if the platform does not provide more about fake accounts on its website.

Texas Attorney General Ken Paxton also revealed on Monday that he was launching an investigation into Twitter for ‘potentially misleading Texans on the number of its ‘bot’ users.’

Paxton argued he has a duty to protect Texans from the company if it is indeed misrepresenting bot data in an effort to drive up revenue. 

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