Stock market analysts agree that Musk’s attempt delay the deal to purchase Twitter was a ploy to get a lower price. The statistical analysis he suggested for analysing accounts from a 100-member sample is not representative.
Elon Musk justification for his decision to use a 100-account sample was the fact that Twitter uses this number during its internal audit. Reuters explains that the statements Musk made about the calculation method have already led to discontent among Twitter lawyers.
The analysis’s ultimate goal is to identify fake and duplicate accounts. It also identifies those that are used to spread advertising information. Twitter initially stated that they had a share of 5% of the active audience. CNBC resources indicate that there are many problems in this context.
Twitter admitted at its most recent quarterly reporting event that it might have been giving a misleading impression about the number of active users in the past three-years. In March 2019, a new function was introduced that allowed one user switch between multiple accounts. These accounts could then be viewed as unique in the user activity statistics. The accumulated error was between 1.4 and 1.9 million users. In reality, they do not exist.
Second, experts point out that 100 accounts is not enough to determine the percentage of fake accounts. BotSentinel analyses the activity of over 2.5 million Twitter users. According to them, the proportion of suspicious accounts ranges between 10 and 15%. It is important that you understand that this percentage can increase in certain branches when it comes to controversial topics like politics, climate change, pandemic, and cryptocurrency. However, the bots tend to be less popular in areas where users are discussing pets or other non-threatening hobbies.
Statisticians agree that it is necessary to have a larger sample than the 100 accounts the Elon Musk team will be using to identify spam and bots on Twitter pages. Experts find this approach absurd and it could not be related to the reason Musk had to stop preparations for the deal. Based on the stock market reaction, some sources estimate that 60% of the deal’s collapse is possible.