4 ms·

Yes, but I think it's reasonable to demand evidence that the mDAU numbers really do include only 5% bots. Laziness and wrong incentives could easily combine to

by tlb 4y ago

Yes, but I think it's reasonable to demand evidence that the mDAU numbers really do include only 5% bots. Laziness and wrong incentives could easily combine to let that percentage creep up over the years. It wouldn't be the first company this happened to. It's hard to have 100% confidence in Twitter's ability to classify bots accurately for mDAU purposes, given their terrible accuracy for anti-spam purposes. It's a slightly different problem (because ads can be counted after the fact while anti-spam has to be immediate) but it raises enough doubt about the mDAU numbers that I'd want to see more data.

natroniks 4y ago
It is prudent to check all facts when negotiating an acquisition. The time to do this was before agreeing to the acquisition. I would also argue the way he's doing it is wrong, but I'm not a hardball negotiator so maybe publicly venting is right. I think it is important that we all distinguish between DAU and MDAU when debating what the likely number is. Frankly, I do not understand why it matters. Musk bought the company based on the idea that it is undervalued: 1) he wants to move away from ads and 2) he wants to grow the user base. If it turns out there are fewer "real" users on the platform than previously thought, isn't that bullish for the prospect of adding more users? I find Musk's tactics to be abhorrent, but I'm looking beyond tactics at the core argument: I do not think it's clearly bad if it turned out Twitter had fewer than expected users when his case is that he can add more users. So long as they didn't fudge the money numbers - earnings and revenue - I don't see how this metric is considered material enough to break the deal.
- vehementi 4y ago
  What he's saying today is distinct from the MAE implication, he's saying that he has the right to this info now (not that it is part of due diligence). He quotes some parts of the original merger agreement and claims his right to this data falls under that.
- tlb 4y ago
  Public companies are limited in what data they can provide to potential buyers. In general, they can't provide any more than what's in their public statements. The SEC enforces this rule to ensure that all investors have access to the same info. Also, when buying public companies, you have to be extremely careful not to let word get out before it's publicly announced. It's easy to imagine a Twitter employee tasked with sending logs to E.M. Acquisition Corp leaking this particular bombshell to the press. So it's normal to make an acquisition bid based only on their publicly reported numbers. The acquisition contract provides for a due-diligence phase that happens between when the deal is announced and when it's final (ie, now) where the buyer can verify that there aren't material misrepresentations in the public filings. If there are, they can back out. Everything about this process is normal, except the hyperventilating press.
TheCoelacanth 4y ago
I don't think it really is. Their estimate of 5% of mDAU being bots came with a lot of caveats that should cover them unless there is evidence of them specifically setting out to come up with a fraudulent estimate. It would have been reasonable to dig into during due diligence, but Musk waived due diligence.

by tlb 4y ago

natroniks 4y ago

It is prudent to check all facts when negotiating an acquisition. The time to do this was before agreeing to the acquisition. I would also argue the way he's doing it is wrong, but I'm not a hardball negotiator so maybe publicly venting is right. I think it is important that we all distinguish between DAU and MDAU when debating what the likely number is. Frankly, I do not understand why it matters. Musk bought the company based on the idea that it is undervalued: 1) he wants to move away from ads and 2) he wants to grow the user base. If it turns out there are fewer "real" users on the platform than previously thought, isn't that bullish for the prospect of adding more users? I find Musk's tactics to be abhorrent, but I'm looking beyond tactics at the core argument: I do not think it's clearly bad if it turned out Twitter had fewer than expected users when his case is that he can add more users. So long as they didn't fudge the money numbers - earnings and revenue - I don't see how this metric is considered material enough to break the deal.

vehementi 4y ago
What he's saying today is distinct from the MAE implication, he's saying that he has the right to this info now (not that it is part of due diligence). He quotes some parts of the original merger agreement and claims his right to this data falls under that.
tlb 4y ago
Public companies are limited in what data they can provide to potential buyers. In general, they can't provide any more than what's in their public statements. The SEC enforces this rule to ensure that all investors have access to the same info. Also, when buying public companies, you have to be extremely careful not to let word get out before it's publicly announced. It's easy to imagine a Twitter employee tasked with sending logs to E.M. Acquisition Corp leaking this particular bombshell to the press. So it's normal to make an acquisition bid based only on their publicly reported numbers. The acquisition contract provides for a due-diligence phase that happens between when the deal is announced and when it's final (ie, now) where the buyer can verify that there aren't material misrepresentations in the public filings. If there are, they can back out. Everything about this process is normal, except the hyperventilating press.

TheCoelacanth 4y ago

I don't think it really is. Their estimate of 5% of mDAU being bots came with a lot of caveats that should cover them unless there is evidence of them specifically setting out to come up with a fraudulent estimate. It would have been reasonable to dig into during due diligence, but Musk waived due diligence.