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Elon Musk 'violated' Twitter NDA over bot-check sample size

<5% figure was based on 100 accounts, if you're wondering

Updated Last week Elon Musk hit pause on his Twitter acquisition over the platform's "less than 5 percent" bot figure.

The Register asked the microblogging website how it made the estimate and was stonewalled, but in ensuing discussions over the weekend, Musk blurted out that the sample size was 100 accounts.

One Musk fan asked how the userbase might help uncover the "real percentage" of fake accounts and was told:

Amusingly, the next day Musk tweeted:

The number of fake accounts on Twitter is pertinent because it will affect plans to monetize the platform. The "less than 5 percent" figure was raised in Twitter's latest earnings release [PDF] on April 28 which 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 [monetizable daily active users] during the quarter."

Obviously, Musk has taken issue with the estimate, and his initial statement on the matter sent Twitter shares down over 10 percent to $40.40, some way below the $54.20 Musk offered. They're currently sitting at $40.72.

Questions are running wild about what Musk actually intends to do here. Is he trying to get the price reduced? Is he having second thoughts? Maybe he is looking for a way to walk away from the deal without losing face.

Richard Holway, an analyst at TechMarketView, mused: "You may think this is just an entertaining sideshow. But real people are getting hurt. Twitter has already announced job losses and rescinded recent job offers. Recent buyers of Twitter shares might well have taken Musk at his word. Clearly that wasn't that wise as they are now nursing big losses.

"I always thought there were trading regulations around making price sensitive announcements. Every tweet that Musk makes moves markets – see his comments on taking cryptocurrency to buy Tesla cars etc.

"It's all getting a bit beyond a joke now…" ®

Updated to add

Twitter CEO Parag Agrawal has responded by tweeting that the estimate of less than five percent comes from "multiple human reviews (in replicate) of thousands of accounts, that are sampled at random, consistently over time, from accounts we count as mDAUs [monetizable daily active users]. We do this every quarter, and we have been doing this for many years."

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