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This whole thing is extremely dumb for at least three reasons: 1. Musk is talking about percent of daily active users that are bots, but Twitter's SEC filings

by necubi 4y ago

This whole thing is extremely dumb for at least three reasons: 1. Musk is talking about percent of daily active users that are bots, but Twitter's SEC filings refer to the percent of monetizable users that are bots, i.e., users that actually get shown ads. There is no way for Elon to produce a comparable figure from the firehose data 2. Even if he could, the firehose doesn't contain the sort of PII you would need to determine whether a user be a bot. 3. But even if it did, none of this matters. He can get out of the deal only if he proves the error would cause a material adverse effect on the company, which is an extremely high bar that is basically never met and would certainly not be met due to an erroneous estimate in a SEC filing.

duxup 4y ago
Could this be a fishing expedition for some other reason to back out?
- dekhn 4y ago
  With Musk it's hard to know exactly what his plan is, but I think it's an attempt to either find a way to back out, reduce the overall price, or otherwise cause chaos as an intentional strategy.
  - ModernMech 4y ago
    - felixfurtak 4y ago
      More likely global stock markets took a dive which devalued Twitter (and Tesla) substantially making the offer over-priced.
      - behnamoh 4y ago
        well maybe he should not have offered a price based on meme numbers then.
      - dannyw 4y ago
        He should have hedged then. If markets have gone up, he would've reaped the benefits and Twitter wouldn't be able to back out.
    - water554 4y ago
      Hypermanic
      - daseiner1 4y ago
        there is no such this as “hypermania” there is mania (Bipolar I) and hypomania (“lesser mania”) (Bipolar II)
        ModernMech 4y ago
        And for anyone wondering, the difference between the two is the presence of psychosis.
    - deleted 4y ago
      [deleted]
    - heavyset_go 4y ago
      I think it's a character thing for Musk, he's simply the kind of person who does things like this because he can.
      - donthellbanme 4y ago
    - kmonsen 4y ago
      This is true, speaking from experience with bipolar people close to me.
    - concinds 4y ago
      No psychiatrist would diagnose someone based on public performances, and non-psychiatrists using pop-psychology to do so is very unpleasant. This is a wider cultural trend too. The prevalence of Dunning-Kruger pop-psychology YouTube videos (again made by people with zero medical degree) nowadays "teaching" people to recognize "Narcissism", "Psychopathy", "Mania", "Manipulation" etc. is absolutely vile. Just teach people assertiveness and leave it at that.
      - ModernMech 4y ago
        I’m not diagnosing, I’m saying there is another possible reason. Nothing about Elon tells me he’s not bipolar.
  - coffeeblack 4y ago
- option 4y ago
  Or maybe he is trying to force them do their jobs (reduce bots/spam) even before he officially takes over
  - duxup 4y ago
    Wouldn’t it be easier to close the deal and just do that thing? Doesn’t make sense to buy the company to do things and… not just do that.
    - sigstoat 4y ago
      if you can get the company to do things you think are valuable before you’re making interest payments on money you borrowed to buy it, that makes a lot of sense. wtf knows if that’s what’s going on.
      - duxup 4y ago
        If it is important wouldn’t you want to do it? It’s not like flipping a switch, how matters, as does following up on effectiveness and so on. I would think someone planning to run the company would want to do it right…
    - prawn 4y ago
      Especially given the big pitch was that he'd clean up the bots. If there are loads of bots, that would make it easy to get a cheap win and look like a hero.
  - hef19898 4y ago
    Twitters job is to make money, so if they can monetize bots nobody has any problem with those.
- WoahNoun 4y ago
  That is what Matt Levine has hypothesized for several weeks. https://www.bloomberg.com/opinion/articles/2022-06-09/elon-will-read-the-tweets https://www.bloomberg.com/opinion/articles/2022-06-09/elon-w... https://www.bloomberg.com/opinion/articles/2022-06-06/elon-has-a-new-bot-excuse https://www.bloomberg.com/opinion/articles/2022-06-06/elon-h... https://www.bloomberg.com/opinion/articles/2022-05-17/elon-musk-does-not-care-about-spam-bots https://www.bloomberg.com/opinion/articles/2022-05-17/elon-m... https://www.bloomberg.com/opinion/articles/2022-05-13/elon-musk-trolls-twitter https://www.bloomberg.com/opinion/articles/2022-05-13/elon-m...
- ummonk 4y ago
  It's been fairly obvious that he's been trying to find a way out or to renegotiate the deal after the recent pullback in tech valuations, and is grasping at the bot claims as an attempted excuse to do so.
  - invig 4y ago
    It's been speculated. What if there's nothing to read between the lines here and he's just saying what he thinks?
    - HWR_14 4y ago
      What he said was he wants to renegotiate the price or leave the deal. So, it's less "reading between the lines" and more "reading what he wrote"
      - invig 4y ago
        Are you using this Tweet as your source? Because that's not what he said. https://twitter.com/elonmusk/status/1526465624326782976 https://twitter.com/elonmusk/status/1526465624326782976
        HWR_14 4y ago
        No, I'm not basing it off that tweet. I'm basing it off (summaries of) his interview on the podcast "All-In" from mid-May.
        squidbeak 4y ago
        I'd be interested in reading those summaries. Would you care to link?
        HyprMusic 4y ago
        You can find notes on the podcast here: https://podcastnotes.org/all-in-podcast/e69-elon-musk-on-twitters-bot-problem-specexs-grand-plan-tesla-stories-giga-texas-more-all-in-with-chamath-jason-sacks-friedberg/ https://podcastnotes.org/all-in-podcast/e69-elon-musk-on-twi...
webo 4y ago
For me the main and obvious thing about DAU is that the majority of users are readers-only. They don’t tweet or like stuff. Firehose might help with detecting non-bot _tweeters_.
- jameshart 4y ago
  Right. There are no ads on the "compose tweet" page Pew analysis (based on surveying humans) says "97% of tweet volume comes from the top 25% most active tweeters"[1] So Musk is arguing about a statistic that twitter claims, which is that spambots make up less than 5% of users. Now, if those bots are part of the most active 25%, then they make up 1/5 of the 'most active' user population. So it seems plausible that they could well be responsible for 1/5 of tweets. Which matches exactly what Musk is claiming - that 20% of tweets are from spam bots. Which still makes no difference to Twitter's ability to sell Advertising targeting the 95% of users who are humans, 75/95 (=79%) of which are only responsible for 3% of tweets, but... presumably... 79% of ad revenue. Because they only serve you ads when you're looking at a feed. And that's what those users are using Twitter to do. [1] https://www.fastcompany.com/90697826/the-top-25-most-active-twitter-users-produce-97-of-all-tweets-while-most-of-us-just-lurk https://www.fastcompany.com/90697826/the-top-25-most-active-...
  - Helmut10001 4y ago
    The famous pareto law - 80% of effects come from the top 20% of causes (users).
    - Scoundreller 4y ago
      I think tweet volume is the wrong approach. If they looked at tweet impressions, it would be like 0.1% of users are responsible for 99% of tweet impressions.
      - Helmut10001 4y ago
        I think in this case, the pareto law would need to be framed with "The top 20% of most viewed tweets are responsible for 80% of tweet impressions".
deleted 4y ago
[deleted]
saghm 4y ago
> monetizable users that are bots, i.e., users that actually get shown ads. Am I understanding this right? I would assume no matter how many ads you show a bot, they wouldn't end up buying anything. Or is the point that that those ad sales are not a reliable source of income since the people buying them would likely decide they weren't getting a good enough return?
- WoahNoun 4y ago
  Most ads are shown to users viewing tweets but don't tweet themselves. So the firehouse data is useless for finding bot among monetizable users.
polemic 4y ago
It's entirely rational. He's on the hook for $1B. He is highly incentivized to obfuscate, lobby and otherwise delay making that payment any way he can. It's not about being right, at this point.
- nixgeek 4y ago
  Musk is not on the hook for $1B, Musk is on the hook for $44B. Delaware has significant precedent for forcing consummation of business deals in cases like these when the acquirer has the means, which Musk clearly does. https://www.axios.com/2022/05/14/the-musk-twitter-endgame https://www.axios.com/2022/05/14/the-musk-twitter-endgame
  - kmonsen 4y ago
    But Elon also has a not given a fuck in the past and gotten away with it. My guess is he will get away with it again, but then are we really living in a society with equal laws for everyone?
    - MisterBastahrd 4y ago
      Texas isn't going to protect him (because they can't), so unless he wants to flee the country, he doesn't have many options.
      - hef19898 4y ago
        That eould be great, Musk trying to "Ghosn" out of it. Ghosn: Carlos Ghosn, former CEO of Nissan-Renault, held on Japan for some white collar crime and illegally smuggled out of Japan, with the help of a former Green Beret and his son, to Libanon, Ghosn home country. Since then he is no longer CEO and wanted internationally by Japan.
- dahdum 4y ago
  Right, he wants out of the deal on the terms but I don’t think it’s the $1B he’s worried about. It’s the embarrassment of either having to pay the break up fee or overpaying so much at $54.20. His ego is at stake, he’s called many things but not often a fool.
uhuruity 4y ago
What do you think Musk is trying to do then? I'm crediting him with enough intelligence to know the points you're making.
- pkulak 4y ago
  You may be making a mistake. All evidence points to Tesla stock tanking, and him wanting out of the deal.
- deleted 4y ago
  [deleted]
- mattnewton 4y ago
  My guess is he is trying to bluff them into changing the terms of the deal. In the current tech market, the price he is paying is suddenly not attractive at all, and will require a substantially higher stake of his Tesla shares. If he can get them to believe he will walk he might be able to renegotiate the price lower or get out altogether with paying only a $1b fee. I don’t think either of those things are likely but with $XXb on the line it’s worth a try to Musk?
  - tsimionescu 4y ago
    > If he can get them to believe he will walk he might be able to renegotiate the price lower or get out altogether with paying only a $1b fee. Now that he can't simply walk away and pay $1B. The contract he signed has a few extremely limited circumstances where the deal may fall through, and in those few cases, he would pay the $1B. In any other case, he has to pay the full amount.
    - matwood 4y ago
      Exactly. Twitter doesn't have to accept a lower deal. Musk is on the hook for the deal he signed.
- invig 4y ago
  Occom's Razor says he's just saying what he thinks when asked questions, which given his behavior on Twitter is entirely normal.
cassac 4y ago
1) It is dumb they can’t provide data for him to calculate a comparable figure. 2) Then they should provide data he can use to verify their figure. It is dumb they won’t provide it and are providing noise instead. 3) He’s not trying to get out of the deal, he’s calling them out on their figure. It’s dumb they aren’t giving him the data he can use to verify their figure and he wants to expose them prior to the deal to show how effective he will be when(if) he “cleans” it up.
- shuckles 4y ago
  The number of bots on Twitter isn’t a condition of closing the deal, though?
  - labcomputer 4y ago
    IIRC, there was a term that stipulated that Twitter’s SEC reports needed to not contain material misrepresentations. So, he could nix the deal if the number of bots was different than previously disclosed.
    - threeseed 4y ago
      > So, he could nix the deal if the number of bots was different than previously disclosed Not just different but materially and verifiably different. So the onus would be Musk to produce numbers that are significantly higher and just as accurate if not more than Twitter.
      - glenngillen 4y ago
        As with many financial market things, Matt Levine’s summaries are great on this. Twitter has been reporting these numbers for many, many years now. The public market has accepted them for many, many years. Elon has been complaining about the bots for maybe as long. So nothing has changed between Musk making the binding offer and today with regards to bots. He has not suddenly been surprised about some discovery. This is not something that materially changes what he thought Twitter was worth. It’s just another game to distract people.
colechristensen 4y ago
We’re just watching an acquisition game involving avoiding lawsuits and liability, exactly what each player is after is a mystery but it’s all to maximize outcome and minimize liability.
- kmonsen 4y ago
  It's not a mystery. All tech stocks, including Twitter and Tesla, have teamed after Elon's offer. So now he doesn't want to buy it at all, or not for this price. So he is trying to find an excuse.
  - umeshunni 4y ago
    Very likely he's looking for a discount.
    - kmonsen 4y ago
      Maybe, I think he doesn't want to buy at all. With TSLA down almost 50% since he proposed to buy it based on loans against his stocks it would be very expensive for him at any price now. But I mean who knows, your guess is as good as mine. I think it was an impulse buy and now he has regrets.
      - cloutchaser 4y ago
        So, does he not want to buy, or not under current market conditions? :)
      - tinyhouse 4y ago
        He doesn't have loans against his Tesla stock anymore. He replaced those.
    - skohan 4y ago
      On what grounds would Twitter possibly offer a discount? He made an offer, filed with the SEC, and they accepted. As far as I understand he's currently contractually obligated to go through with it.
graeme 4y ago
So, he could have got out of the deal if twitter breached a covenant, and one covenant had to do with data provision. By providing all the data requested, twitter just squashed that out. He had no out on the bot claim itself, but his legal team was comfortable that the covenant breach was a colorable claim and wrote a letter. Now they need to think of a new legally plausible claim.
- coffeeblack 4y ago
  How is the firehouse “all the data”? It’s just the posts. Probably the most useless part of the data if your goal is bot detection. But people seem to fall for it.
  - hef19898 4y ago
    Let's assume Twitter and Musk are in deed playing this game here, then people and whether or not the data provided by Twitter is enough to detect bots is not the point. Whether or not the SEC, and courts at some point, see the shared data as sufficient for Twitter to fulfill transparency requirements is important.
    - coffeeblack 4y ago
      Correct, for the legal part of the purchase. But there is also a “public opinion” part, and that’s about politics. I have the impression that Tw is trying to at least remain in control until the upcoming elections.
      - hef19898 4y ago
        Only that public opinion so doesn't matter when it comes to the legal aspects of this. And this has nothing to do with elections whatsoever, just with a but hurt trying to buy Twitter out of spite.
        coffeeblack 4y ago
threeseed 4y ago
> Even if he could, the firehose doesn't contain the sort of PII you would need to determine whether a user be a bot. What data would that be though ? 1) Email addresses would be valid since they are used during the verification process. 2) Location data is only available on mobile which bots obviously won't be using. 3) IP address data would be filtered through compromised hosts. 4) Interaction data is probably the key one. But this is trivially forged. The type of bots that are most common on Twitter are those from well funded interests e.g. governments, companies or technical ones e.g. hackers. People who know what they are doing and would be building something largely imperceptible from ordinary users.
- scumola 4y ago
  I agree here. The firehose is 'downstream' from the client actually interacting with the API which is where all of the real tracking data would live. Giving Musk the firehose data is useless to him. Musk needs the user database, the web server logs and any historical data on any suspected bots that twitter already has collected over the years. Twitter spam bots that offer to sell me bitcoin or start following me with a beautiful profile picture who just opened their twitter account and I don't know are pretty obviously bots to me. The former could be found using the firehose, but the latter wouldn't be detected until they tweeted something in the firehose. If the firehose included DMs, new accounts (with all available signup and verification data), etc. then the firehose would be useful. Detecting bots using the firehose would only detect bots based on suspicious tweet content and nothing else. Also, the firehose is a 7Mbps (compressed) stream. It takes substantial compute power to run just sentiment analysis and substantial storage to keep heuristics on that volume of data. Musk would need to spend some time and money and hire some people to just make sense of the full firehose. Source: I worked for GNIP in 2012. GNIP used to re-sell the twitter firehose and was a twitter partner before they were acquired by twitter in 2014.
nomel 4y ago
> not be met due to an erroneous estimate in a SEC filing. I've seen this mentioned elsewhere also, but I really need help here. From my understanding, Twitter's entire business model, and existing revenue stream, is people paying them to show content/ads to other humans. If some unknown percent of users are not human, doesn't that have a pretty extreme, direct, influence on the possible revenue? If someone wants to buy Twitter, I assume their first question would not be, what percent of users that you're currently showing ads to are bots. Rather, it would be what percent of users are real, so I can show ads to all of them. Which bring up the question, why isn't Twitter showing ads to some users?
- cmdli 4y ago
  Material adverse effects have to be rather large; for instance, the company is actually worth 50% less than it was represented as. Even if the bot count is significantly higher (say, 20%) that wouldn't have an easily provable massive effect on revenue. Twitter still makes what it makes, and it still would be roughly the same in terms of profitability. Keep in mind that the onus is on Elon to prove to a court that the higher bot count has a large, material impact (on the order of 50% of Twitter's revenue). It's not something that is a matter of opinion, but rather based on his ability to argue his position to the court, for which he needs strong evidence.
  - tptacek 4y ago
    Via Levine, more on the insanely high standard Delaware sets for MAEs (the rule of thumb Levine gives is "a 40% decrease in long-term profitability"): https://www.jonesday.com/en/insights/2018/10/delaware-chancery-court-finally-finds-an-mae https://www.jonesday.com/en/insights/2018/10/delaware-chance... This is about Delaware finding that an MAE occurred, for the first time ever, like literally ever, in 2018. What we have here is a case where Twitter's performance isn't even faltering (it's stock price is, but its 2022 revenues are actually up). There's not a chance in hell for the MAE argument.
  - andresp 4y ago
ryanSrich 4y ago
I think Elon also made a mistake by calling these things bots. Most spam on Twitter is a combination of auto account creation or takeover, and then some human in a third world country using that account to scam people. I don’t think Twitter would call that a bot, but I bet Elon would. I do think Twitter in its current form is essentially unusable due to the amount of scams. I see thousands on a weekly basis. Every feature, from tweets, replies, lists, etc. is a cesspool of scamming. I block 100s of users per week and yet I still get added to “Free ETH drop” lists daily.
- russdill 4y ago
  "After we determine an account is spam, malicious automation, or fake, we stop counting it in our mDAU" The mDAU exclusion includes such accounts already. I think people (and Elon) use the term bot rather colloquially, so I don't think it's an important distinction anyway.
zaptheimpaler 4y ago
Dumbest of all, why did Musk even start this clown show of pretending to want to acquire Twitter in the first place? Even after the drops in tech stocks, he has enough money to fund the takeover if he really wants it. Did he not even consider that possibility? Twitter having bots is not surprising to anyone even a tiny bit informed. Their public records and filings have this data. Did he not even read those? The whole thing is just bizarre and stupid, yes.
- dna_polymerase 4y ago
  He does not have enough money to fund the takeover. That's pretty obvious. If we would sell $42B worth of Tesla stock the stock would simply crash. There is no way for him to just get the money out of the markets, especially not right now when liquidity is already drying up.
- petesergeant 4y ago
  He's going to end up having spent $1bn of his $140bn (in fees, if I understand it right) to have been a major news story for a few weeks. I could see that representing good value-for-money
  - gchadwick 4y ago
    I don't think Musk is exactly struggling to maintain a big media profile. This story might keep him in the headlines more but it's hardly making him look good. Rather I'd say it seriously damages his reputation as a serious player. He looks more interested in sounding off on twitter and messing around. Following this mess if he approached you with an offer to buy your business how seriously would you want to take him?
    - petesergeant 4y ago
      > if he approached you with an offer to buy your business how seriously would you want to take him Not seriously, HOWEVER, I would now worry about him a lot more as a competitor or enemy as he's shown he's happy to blow what is -- to me -- an unthinkable amount of cash on whimsy and for the lulz.
Quequau 4y ago
Most of the time when I see someone who ostensibly not cripplingly stupid do or say something that by all accounts is, in point of fact stupid, and then later on I come to learn of a fuller picture of the whole ordeal it turns out that the stated goals and motivations were not actually the true goals and motivations. I see this in politicians pretty often. Anyway, I figure we should all suspect that the actual goal of this charade is not simply "to acquire Twitter" and motivation is not "to protect free speech" or "solve Twitter's bot problem" or whatever.
- nisegami 4y ago
  I'm not convinced there was a goal behind all this. It smells to me most strongly of manic behavior on Musk's part.
  - rchaud 4y ago
    He sold a giant chunk of Tesla shares weeks before the price cratered. It was ostensibly to raise cash to acquire Twitter. But now that he's trying to claim shenanigans and walk away, it's beginning to look more a way to evade insider trading charges.
    - deleted 4y ago
      [deleted]
  - popcorncowboy 4y ago
    Yup. Above a certain height, you start drinking your own kool-aid, the people in even your closest circles turn into yes-men, and the world increasingly appears to revolve around you. It's impossible to avoid the hubris that comes from this. And this effect resists even the best efforts to "stay grounded". Eventually your answer to the "why" becomes simply: because you can.
- sanderjd 4y ago
  Seems to me that he did / does want to buy Twitter (not because of free speech or whatever, but as a rich guy vanity project), but then the stock market crashed and now the price he agreed to is way too high so he's trying to weasel out of it or weasel the price down. Either way he's just being a weasel.
blagie 4y ago
This is not dumb. I'm 100% on Elon's side here. He should be allowed to kick the tires. I've been in an organization which went through something similar twice, in both cases, based on material misrepresentations. In the first case, two organizations who should have known better invested tens of millions of dollars, with one effectively defrauding the other. In another case, a $3.5B organization bought an $800M organization, and the combined entity was worth less than $800M within a year. Serious, when spending tens or hundreds of millions, do your due diligence. People and organizations lie all the time. I'd be against Elon if he backed out of the transaction based on a material change. Failure to provide data? He's being perfectly reasonable.
- parkingrift 4y ago
  Elon waived his right to due diligence. I can’t speak to his motivations for waiving his rights to due diligence.
  - YooLi 4y ago
    This is wrong and if it's the same idea floating around Twitter based on page 17 of the 13D, it's definitely wrong. People are misinterpreting a reference to no longer being subject to seller's due diligence because financing has been secured, i.e. the buyer is qualified.
  - blagie 4y ago
    Never mind then. Waiving due diligence is a crazy dumb decision. The one lesson in my career is always do due diligence, whether you're making a $40B transaction, or negotiating stock options with a startup. People cheat. A lot.
    - parkingrift 4y ago
      I agree. I don’t know what his motivations were or are. This whole thing about not accounts is even more ridiculous when you consider that Musk was tweeting about not accounts in January. Elon Musk knee bots were a problem before he made an aggressive acquisition maneuver, and knowingly waived his rights. But people keep telling me this guy is a genius. I guess I’m not smart to understand his level of thinking.
spiantino 4y ago
He doesn’t need MAE here, he would need to show the company broke a covenant - specifically the one saying they will provide reasonable answers / data to his inquiries. It’s a stretch, though
bambax 4y ago
Yes but no. You're absolutely right on your three points, esp. the 3rd that states that proving an MAE is an extremely high bar that is basically never met. But! There's another way out for Musk. Merger agreements include covenants, promises that the parties make to one another about what they will do to close the deal. If one of the parties can prove that the other didn't fulfill a covenant obligation and therefore broke its promise to work towards closing in good faith, then that's a valid justification to walk away. The merger agreement includes covenants that force Twitter to provide any and all information "reasonably" requested by Musk, in a timely manner. So the game becomes: how to trick Twitter into not respecting its obligations? One way is to ask for information that is impossible to provide: "Give me all the tweets since the beginning of time, each tweet on a single piece of paper!" But Twitter might object, and a judge might find, that this is done in bad faith... The other, more subtle way is to ask for information that Twitter should be very anxious and reluctant to provide, such as, for example, personal information regarding users. Twitter may run afoul of many regulations if it does, and has reasons to believe Musk won't honor any NDA he might sign (as he has a history of disrespecting his own word). Yet on the other hand, Musk can argue that he's entitled to ask for such information. That's the nature of the current game. I don't think there's any way this isn't settled in court. Note: for more on this, cf. Matt Levine's newsletter from June 6th.
besieged09 4y ago
I have a hard time believing that twitter can't get accurate data about which accounts aren't behaving like humans. You can look at user agents to start. Heck, even basic analytics cookies capture a lot of information that is useful- like first and last time page visit, number of page views, duration of time on page. I bet twitter server logs have more granular information that they can easily tell who is a bot.
resoluteteeth 4y ago
It's also dumb because in April he was already aware of the bot problem and specifically said that he was going to fix it if he succeeded in taking over twitter, so suddenly calling off the deal because of it makes no sense: https://twitter.com/elonmusk/status/1517215066550116354?ref_src=twsrc%5Etfw https://twitter.com/elonmusk/status/1517215066550116354?ref_...
toss1 4y ago
Important distinction there between the monetizeable users who are bots vs all bots, and certainly key to advertising revenue. The more key metric for the integrity of the platform, it's ability to be a trustworthy indicator of real people's sentiments, vs firehoses of disinformation into a cesspool of lies and fake interactions, is not the percentage of bots (monetizable or not), but the percentage of bot vs real person posts.
wdb 4y ago
Does SEC feeling define what makes a Twitter user monetizable? Even knowing how much users bots is good to know. Personally, never believed he really wanted to buy Twitter

by necubi 4y ago

duxup 4y ago

Could this be a fishing expedition for some other reason to back out?

dekhn 4y ago
With Musk it's hard to know exactly what his plan is, but I think it's an attempt to either find a way to back out, reduce the overall price, or otherwise cause chaos as an intentional strategy.
- ModernMech 4y ago
  - felixfurtak 4y ago
    More likely global stock markets took a dive which devalued Twitter (and Tesla) substantially making the offer over-priced.
    - behnamoh 4y ago
      well maybe he should not have offered a price based on meme numbers then.
    - dannyw 4y ago
      He should have hedged then. If markets have gone up, he would've reaped the benefits and Twitter wouldn't be able to back out.
  - water554 4y ago
    Hypermanic
    - daseiner1 4y ago
      there is no such this as “hypermania” there is mania (Bipolar I) and hypomania (“lesser mania”) (Bipolar II)
      - ModernMech 4y ago
        And for anyone wondering, the difference between the two is the presence of psychosis.
  - deleted 4y ago
    [deleted]
  - heavyset_go 4y ago
    I think it's a character thing for Musk, he's simply the kind of person who does things like this because he can.
    - donthellbanme 4y ago
  - kmonsen 4y ago
    This is true, speaking from experience with bipolar people close to me.
  - concinds 4y ago
    No psychiatrist would diagnose someone based on public performances, and non-psychiatrists using pop-psychology to do so is very unpleasant. This is a wider cultural trend too. The prevalence of Dunning-Kruger pop-psychology YouTube videos (again made by people with zero medical degree) nowadays "teaching" people to recognize "Narcissism", "Psychopathy", "Mania", "Manipulation" etc. is absolutely vile. Just teach people assertiveness and leave it at that.
    - ModernMech 4y ago
      I’m not diagnosing, I’m saying there is another possible reason. Nothing about Elon tells me he’s not bipolar.
- coffeeblack 4y ago
option 4y ago
Or maybe he is trying to force them do their jobs (reduce bots/spam) even before he officially takes over
- duxup 4y ago
  Wouldn’t it be easier to close the deal and just do that thing? Doesn’t make sense to buy the company to do things and… not just do that.
  - sigstoat 4y ago
    if you can get the company to do things you think are valuable before you’re making interest payments on money you borrowed to buy it, that makes a lot of sense. wtf knows if that’s what’s going on.
    - duxup 4y ago
      If it is important wouldn’t you want to do it? It’s not like flipping a switch, how matters, as does following up on effectiveness and so on. I would think someone planning to run the company would want to do it right…
  - prawn 4y ago
    Especially given the big pitch was that he'd clean up the bots. If there are loads of bots, that would make it easy to get a cheap win and look like a hero.
- hef19898 4y ago
  Twitters job is to make money, so if they can monetize bots nobody has any problem with those.
WoahNoun 4y ago
That is what Matt Levine has hypothesized for several weeks. https://www.bloomberg.com/opinion/articles/2022-06-09/elon-will-read-the-tweets https://www.bloomberg.com/opinion/articles/2022-06-09/elon-w... https://www.bloomberg.com/opinion/articles/2022-06-06/elon-has-a-new-bot-excuse https://www.bloomberg.com/opinion/articles/2022-06-06/elon-h... https://www.bloomberg.com/opinion/articles/2022-05-17/elon-musk-does-not-care-about-spam-bots https://www.bloomberg.com/opinion/articles/2022-05-17/elon-m... https://www.bloomberg.com/opinion/articles/2022-05-13/elon-musk-trolls-twitter https://www.bloomberg.com/opinion/articles/2022-05-13/elon-m...
ummonk 4y ago
It's been fairly obvious that he's been trying to find a way out or to renegotiate the deal after the recent pullback in tech valuations, and is grasping at the bot claims as an attempted excuse to do so.
- invig 4y ago
  It's been speculated. What if there's nothing to read between the lines here and he's just saying what he thinks?
  - HWR_14 4y ago
    What he said was he wants to renegotiate the price or leave the deal. So, it's less "reading between the lines" and more "reading what he wrote"
    - invig 4y ago
      Are you using this Tweet as your source? Because that's not what he said. https://twitter.com/elonmusk/status/1526465624326782976 https://twitter.com/elonmusk/status/1526465624326782976
      - HWR_14 4y ago
        No, I'm not basing it off that tweet. I'm basing it off (summaries of) his interview on the podcast "All-In" from mid-May.
        squidbeak 4y ago
        I'd be interested in reading those summaries. Would you care to link?
        HyprMusic 4y ago
        You can find notes on the podcast here: https://podcastnotes.org/all-in-podcast/e69-elon-musk-on-twitters-bot-problem-specexs-grand-plan-tesla-stories-giga-texas-more-all-in-with-chamath-jason-sacks-friedberg/ https://podcastnotes.org/all-in-podcast/e69-elon-musk-on-twi...

webo 4y ago

For me the main and obvious thing about DAU is that the majority of users are readers-only. They don’t tweet or like stuff. Firehose might help with detecting non-bot _tweeters_.

jameshart 4y ago
Right. There are no ads on the "compose tweet" page Pew analysis (based on surveying humans) says "97% of tweet volume comes from the top 25% most active tweeters"[1] So Musk is arguing about a statistic that twitter claims, which is that spambots make up less than 5% of users. Now, if those bots are part of the most active 25%, then they make up 1/5 of the 'most active' user population. So it seems plausible that they could well be responsible for 1/5 of tweets. Which matches exactly what Musk is claiming - that 20% of tweets are from spam bots. Which still makes no difference to Twitter's ability to sell Advertising targeting the 95% of users who are humans, 75/95 (=79%) of which are only responsible for 3% of tweets, but... presumably... 79% of ad revenue. Because they only serve you ads when you're looking at a feed. And that's what those users are using Twitter to do. [1] https://www.fastcompany.com/90697826/the-top-25-most-active-twitter-users-produce-97-of-all-tweets-while-most-of-us-just-lurk https://www.fastcompany.com/90697826/the-top-25-most-active-...
- Helmut10001 4y ago
  The famous pareto law - 80% of effects come from the top 20% of causes (users).
  - Scoundreller 4y ago
    I think tweet volume is the wrong approach. If they looked at tweet impressions, it would be like 0.1% of users are responsible for 99% of tweet impressions.
    - Helmut10001 4y ago
      I think in this case, the pareto law would need to be framed with "The top 20% of most viewed tweets are responsible for 80% of tweet impressions".

deleted 4y ago

[deleted]

saghm 4y ago

> monetizable users that are bots, i.e., users that actually get shown ads. Am I understanding this right? I would assume no matter how many ads you show a bot, they wouldn't end up buying anything. Or is the point that that those ad sales are not a reliable source of income since the people buying them would likely decide they weren't getting a good enough return?

WoahNoun 4y ago
Most ads are shown to users viewing tweets but don't tweet themselves. So the firehouse data is useless for finding bot among monetizable users.

polemic 4y ago

It's entirely rational. He's on the hook for $1B. He is highly incentivized to obfuscate, lobby and otherwise delay making that payment any way he can. It's not about being right, at this point.

nixgeek 4y ago
Musk is not on the hook for $1B, Musk is on the hook for $44B. Delaware has significant precedent for forcing consummation of business deals in cases like these when the acquirer has the means, which Musk clearly does. https://www.axios.com/2022/05/14/the-musk-twitter-endgame https://www.axios.com/2022/05/14/the-musk-twitter-endgame
- kmonsen 4y ago
  But Elon also has a not given a fuck in the past and gotten away with it. My guess is he will get away with it again, but then are we really living in a society with equal laws for everyone?
  - MisterBastahrd 4y ago
    Texas isn't going to protect him (because they can't), so unless he wants to flee the country, he doesn't have many options.
    - hef19898 4y ago
      That eould be great, Musk trying to "Ghosn" out of it. Ghosn: Carlos Ghosn, former CEO of Nissan-Renault, held on Japan for some white collar crime and illegally smuggled out of Japan, with the help of a former Green Beret and his son, to Libanon, Ghosn home country. Since then he is no longer CEO and wanted internationally by Japan.
dahdum 4y ago
Right, he wants out of the deal on the terms but I don’t think it’s the $1B he’s worried about. It’s the embarrassment of either having to pay the break up fee or overpaying so much at $54.20. His ego is at stake, he’s called many things but not often a fool.

uhuruity 4y ago

What do you think Musk is trying to do then? I'm crediting him with enough intelligence to know the points you're making.

pkulak 4y ago
You may be making a mistake. All evidence points to Tesla stock tanking, and him wanting out of the deal.
deleted 4y ago
[deleted]
mattnewton 4y ago
My guess is he is trying to bluff them into changing the terms of the deal. In the current tech market, the price he is paying is suddenly not attractive at all, and will require a substantially higher stake of his Tesla shares. If he can get them to believe he will walk he might be able to renegotiate the price lower or get out altogether with paying only a $1b fee. I don’t think either of those things are likely but with $XXb on the line it’s worth a try to Musk?
- tsimionescu 4y ago
  > If he can get them to believe he will walk he might be able to renegotiate the price lower or get out altogether with paying only a $1b fee. Now that he can't simply walk away and pay $1B. The contract he signed has a few extremely limited circumstances where the deal may fall through, and in those few cases, he would pay the $1B. In any other case, he has to pay the full amount.
  - matwood 4y ago
    Exactly. Twitter doesn't have to accept a lower deal. Musk is on the hook for the deal he signed.
invig 4y ago
Occom's Razor says he's just saying what he thinks when asked questions, which given his behavior on Twitter is entirely normal.

cassac 4y ago

1) It is dumb they can’t provide data for him to calculate a comparable figure. 2) Then they should provide data he can use to verify their figure. It is dumb they won’t provide it and are providing noise instead. 3) He’s not trying to get out of the deal, he’s calling them out on their figure. It’s dumb they aren’t giving him the data he can use to verify their figure and he wants to expose them prior to the deal to show how effective he will be when(if) he “cleans” it up.

shuckles 4y ago
The number of bots on Twitter isn’t a condition of closing the deal, though?
- labcomputer 4y ago
  IIRC, there was a term that stipulated that Twitter’s SEC reports needed to not contain material misrepresentations. So, he could nix the deal if the number of bots was different than previously disclosed.
  - threeseed 4y ago
    > So, he could nix the deal if the number of bots was different than previously disclosed Not just different but materially and verifiably different. So the onus would be Musk to produce numbers that are significantly higher and just as accurate if not more than Twitter.
    - glenngillen 4y ago
      As with many financial market things, Matt Levine’s summaries are great on this. Twitter has been reporting these numbers for many, many years now. The public market has accepted them for many, many years. Elon has been complaining about the bots for maybe as long. So nothing has changed between Musk making the binding offer and today with regards to bots. He has not suddenly been surprised about some discovery. This is not something that materially changes what he thought Twitter was worth. It’s just another game to distract people.

colechristensen 4y ago

We’re just watching an acquisition game involving avoiding lawsuits and liability, exactly what each player is after is a mystery but it’s all to maximize outcome and minimize liability.

kmonsen 4y ago
It's not a mystery. All tech stocks, including Twitter and Tesla, have teamed after Elon's offer. So now he doesn't want to buy it at all, or not for this price. So he is trying to find an excuse.
- umeshunni 4y ago
  Very likely he's looking for a discount.
  - kmonsen 4y ago
    Maybe, I think he doesn't want to buy at all. With TSLA down almost 50% since he proposed to buy it based on loans against his stocks it would be very expensive for him at any price now. But I mean who knows, your guess is as good as mine. I think it was an impulse buy and now he has regrets.
    - cloutchaser 4y ago
      So, does he not want to buy, or not under current market conditions? :)
    - tinyhouse 4y ago
      He doesn't have loans against his Tesla stock anymore. He replaced those.
  - skohan 4y ago
    On what grounds would Twitter possibly offer a discount? He made an offer, filed with the SEC, and they accepted. As far as I understand he's currently contractually obligated to go through with it.

graeme 4y ago

So, he could have got out of the deal if twitter breached a covenant, and one covenant had to do with data provision. By providing all the data requested, twitter just squashed that out. He had no out on the bot claim itself, but his legal team was comfortable that the covenant breach was a colorable claim and wrote a letter. Now they need to think of a new legally plausible claim.

coffeeblack 4y ago
How is the firehouse “all the data”? It’s just the posts. Probably the most useless part of the data if your goal is bot detection. But people seem to fall for it.
- hef19898 4y ago
  Let's assume Twitter and Musk are in deed playing this game here, then people and whether or not the data provided by Twitter is enough to detect bots is not the point. Whether or not the SEC, and courts at some point, see the shared data as sufficient for Twitter to fulfill transparency requirements is important.
  - coffeeblack 4y ago
    Correct, for the legal part of the purchase. But there is also a “public opinion” part, and that’s about politics. I have the impression that Tw is trying to at least remain in control until the upcoming elections.
    - hef19898 4y ago
      Only that public opinion so doesn't matter when it comes to the legal aspects of this. And this has nothing to do with elections whatsoever, just with a but hurt trying to buy Twitter out of spite.
      - coffeeblack 4y ago

threeseed 4y ago

> Even if he could, the firehose doesn't contain the sort of PII you would need to determine whether a user be a bot. What data would that be though ? 1) Email addresses would be valid since they are used during the verification process. 2) Location data is only available on mobile which bots obviously won't be using. 3) IP address data would be filtered through compromised hosts. 4) Interaction data is probably the key one. But this is trivially forged. The type of bots that are most common on Twitter are those from well funded interests e.g. governments, companies or technical ones e.g. hackers. People who know what they are doing and would be building something largely imperceptible from ordinary users.

scumola 4y ago
I agree here. The firehose is 'downstream' from the client actually interacting with the API which is where all of the real tracking data would live. Giving Musk the firehose data is useless to him. Musk needs the user database, the web server logs and any historical data on any suspected bots that twitter already has collected over the years. Twitter spam bots that offer to sell me bitcoin or start following me with a beautiful profile picture who just opened their twitter account and I don't know are pretty obviously bots to me. The former could be found using the firehose, but the latter wouldn't be detected until they tweeted something in the firehose. If the firehose included DMs, new accounts (with all available signup and verification data), etc. then the firehose would be useful. Detecting bots using the firehose would only detect bots based on suspicious tweet content and nothing else. Also, the firehose is a 7Mbps (compressed) stream. It takes substantial compute power to run just sentiment analysis and substantial storage to keep heuristics on that volume of data. Musk would need to spend some time and money and hire some people to just make sense of the full firehose. Source: I worked for GNIP in 2012. GNIP used to re-sell the twitter firehose and was a twitter partner before they were acquired by twitter in 2014.

nomel 4y ago

> not be met due to an erroneous estimate in a SEC filing. I've seen this mentioned elsewhere also, but I really need help here. From my understanding, Twitter's entire business model, and existing revenue stream, is people paying them to show content/ads to other humans. If some unknown percent of users are not human, doesn't that have a pretty extreme, direct, influence on the possible revenue? If someone wants to buy Twitter, I assume their first question would not be, what percent of users that you're currently showing ads to are bots. Rather, it would be what percent of users are real, so I can show ads to all of them. Which bring up the question, why isn't Twitter showing ads to some users?

cmdli 4y ago
Material adverse effects have to be rather large; for instance, the company is actually worth 50% less than it was represented as. Even if the bot count is significantly higher (say, 20%) that wouldn't have an easily provable massive effect on revenue. Twitter still makes what it makes, and it still would be roughly the same in terms of profitability. Keep in mind that the onus is on Elon to prove to a court that the higher bot count has a large, material impact (on the order of 50% of Twitter's revenue). It's not something that is a matter of opinion, but rather based on his ability to argue his position to the court, for which he needs strong evidence.
- tptacek 4y ago
  Via Levine, more on the insanely high standard Delaware sets for MAEs (the rule of thumb Levine gives is "a 40% decrease in long-term profitability"): https://www.jonesday.com/en/insights/2018/10/delaware-chancery-court-finally-finds-an-mae https://www.jonesday.com/en/insights/2018/10/delaware-chance... This is about Delaware finding that an MAE occurred, for the first time ever, like literally ever, in 2018. What we have here is a case where Twitter's performance isn't even faltering (it's stock price is, but its 2022 revenues are actually up). There's not a chance in hell for the MAE argument.
- andresp 4y ago

ryanSrich 4y ago

I think Elon also made a mistake by calling these things bots. Most spam on Twitter is a combination of auto account creation or takeover, and then some human in a third world country using that account to scam people. I don’t think Twitter would call that a bot, but I bet Elon would. I do think Twitter in its current form is essentially unusable due to the amount of scams. I see thousands on a weekly basis. Every feature, from tweets, replies, lists, etc. is a cesspool of scamming. I block 100s of users per week and yet I still get added to “Free ETH drop” lists daily.

russdill 4y ago
"After we determine an account is spam, malicious automation, or fake, we stop counting it in our mDAU" The mDAU exclusion includes such accounts already. I think people (and Elon) use the term bot rather colloquially, so I don't think it's an important distinction anyway.

zaptheimpaler 4y ago

Dumbest of all, why did Musk even start this clown show of pretending to want to acquire Twitter in the first place? Even after the drops in tech stocks, he has enough money to fund the takeover if he really wants it. Did he not even consider that possibility? Twitter having bots is not surprising to anyone even a tiny bit informed. Their public records and filings have this data. Did he not even read those? The whole thing is just bizarre and stupid, yes.

dna_polymerase 4y ago
He does not have enough money to fund the takeover. That's pretty obvious. If we would sell $42B worth of Tesla stock the stock would simply crash. There is no way for him to just get the money out of the markets, especially not right now when liquidity is already drying up.
petesergeant 4y ago
He's going to end up having spent $1bn of his $140bn (in fees, if I understand it right) to have been a major news story for a few weeks. I could see that representing good value-for-money
- gchadwick 4y ago
  I don't think Musk is exactly struggling to maintain a big media profile. This story might keep him in the headlines more but it's hardly making him look good. Rather I'd say it seriously damages his reputation as a serious player. He looks more interested in sounding off on twitter and messing around. Following this mess if he approached you with an offer to buy your business how seriously would you want to take him?
  - petesergeant 4y ago
    > if he approached you with an offer to buy your business how seriously would you want to take him Not seriously, HOWEVER, I would now worry about him a lot more as a competitor or enemy as he's shown he's happy to blow what is -- to me -- an unthinkable amount of cash on whimsy and for the lulz.

Quequau 4y ago

Most of the time when I see someone who ostensibly not cripplingly stupid do or say something that by all accounts is, in point of fact stupid, and then later on I come to learn of a fuller picture of the whole ordeal it turns out that the stated goals and motivations were not actually the true goals and motivations. I see this in politicians pretty often. Anyway, I figure we should all suspect that the actual goal of this charade is not simply "to acquire Twitter" and motivation is not "to protect free speech" or "solve Twitter's bot problem" or whatever.

nisegami 4y ago
I'm not convinced there was a goal behind all this. It smells to me most strongly of manic behavior on Musk's part.
- rchaud 4y ago
  He sold a giant chunk of Tesla shares weeks before the price cratered. It was ostensibly to raise cash to acquire Twitter. But now that he's trying to claim shenanigans and walk away, it's beginning to look more a way to evade insider trading charges.
  - deleted 4y ago
    [deleted]
- popcorncowboy 4y ago
  Yup. Above a certain height, you start drinking your own kool-aid, the people in even your closest circles turn into yes-men, and the world increasingly appears to revolve around you. It's impossible to avoid the hubris that comes from this. And this effect resists even the best efforts to "stay grounded". Eventually your answer to the "why" becomes simply: because you can.
sanderjd 4y ago
Seems to me that he did / does want to buy Twitter (not because of free speech or whatever, but as a rich guy vanity project), but then the stock market crashed and now the price he agreed to is way too high so he's trying to weasel out of it or weasel the price down. Either way he's just being a weasel.

blagie 4y ago

This is not dumb. I'm 100% on Elon's side here. He should be allowed to kick the tires. I've been in an organization which went through something similar twice, in both cases, based on material misrepresentations. In the first case, two organizations who should have known better invested tens of millions of dollars, with one effectively defrauding the other. In another case, a $3.5B organization bought an $800M organization, and the combined entity was worth less than $800M within a year. Serious, when spending tens or hundreds of millions, do your due diligence. People and organizations lie all the time. I'd be against Elon if he backed out of the transaction based on a material change. Failure to provide data? He's being perfectly reasonable.

parkingrift 4y ago
Elon waived his right to due diligence. I can’t speak to his motivations for waiving his rights to due diligence.
- YooLi 4y ago
  This is wrong and if it's the same idea floating around Twitter based on page 17 of the 13D, it's definitely wrong. People are misinterpreting a reference to no longer being subject to seller's due diligence because financing has been secured, i.e. the buyer is qualified.
- blagie 4y ago
  Never mind then. Waiving due diligence is a crazy dumb decision. The one lesson in my career is always do due diligence, whether you're making a $40B transaction, or negotiating stock options with a startup. People cheat. A lot.
  - parkingrift 4y ago
    I agree. I don’t know what his motivations were or are. This whole thing about not accounts is even more ridiculous when you consider that Musk was tweeting about not accounts in January. Elon Musk knee bots were a problem before he made an aggressive acquisition maneuver, and knowingly waived his rights. But people keep telling me this guy is a genius. I guess I’m not smart to understand his level of thinking.

spiantino 4y ago

He doesn’t need MAE here, he would need to show the company broke a covenant - specifically the one saying they will provide reasonable answers / data to his inquiries. It’s a stretch, though

bambax 4y ago

Yes but no. You're absolutely right on your three points, esp. the 3rd that states that proving an MAE is an extremely high bar that is basically never met. But! There's another way out for Musk. Merger agreements include covenants, promises that the parties make to one another about what they will do to close the deal. If one of the parties can prove that the other didn't fulfill a covenant obligation and therefore broke its promise to work towards closing in good faith, then that's a valid justification to walk away. The merger agreement includes covenants that force Twitter to provide any and all information "reasonably" requested by Musk, in a timely manner. So the game becomes: how to trick Twitter into not respecting its obligations? One way is to ask for information that is impossible to provide: "Give me all the tweets since the beginning of time, each tweet on a single piece of paper!" But Twitter might object, and a judge might find, that this is done in bad faith... The other, more subtle way is to ask for information that Twitter should be very anxious and reluctant to provide, such as, for example, personal information regarding users. Twitter may run afoul of many regulations if it does, and has reasons to believe Musk won't honor any NDA he might sign (as he has a history of disrespecting his own word). Yet on the other hand, Musk can argue that he's entitled to ask for such information. That's the nature of the current game. I don't think there's any way this isn't settled in court. Note: for more on this, cf. Matt Levine's newsletter from June 6th.

besieged09 4y ago

I have a hard time believing that twitter can't get accurate data about which accounts aren't behaving like humans. You can look at user agents to start. Heck, even basic analytics cookies capture a lot of information that is useful- like first and last time page visit, number of page views, duration of time on page. I bet twitter server logs have more granular information that they can easily tell who is a bot.

resoluteteeth 4y ago

It's also dumb because in April he was already aware of the bot problem and specifically said that he was going to fix it if he succeeded in taking over twitter, so suddenly calling off the deal because of it makes no sense: https://twitter.com/elonmusk/status/1517215066550116354?ref_src=twsrc%5Etfw https://twitter.com/elonmusk/status/1517215066550116354?ref_...

toss1 4y ago

Important distinction there between the monetizeable users who are bots vs all bots, and certainly key to advertising revenue. The more key metric for the integrity of the platform, it's ability to be a trustworthy indicator of real people's sentiments, vs firehoses of disinformation into a cesspool of lies and fake interactions, is not the percentage of bots (monetizable or not), but the percentage of bot vs real person posts.

wdb 4y ago

Does SEC feeling define what makes a Twitter user monetizable? Even knowing how much users bots is good to know. Personally, never believed he really wanted to buy Twitter