Twitter Needs to Come Clean
by Jeff Brown, editor, The Bleeding Edge
Something Doesn’t Smell Right
The dynamics of the negotiations between Twitter and Elon Musk, concerning Musk’s planned $44 billion acquisition, have not been as straightforward as expected. The deal that was announced on April 25 was a done deal, right?
Not… so… fast…
For weeks, Musk has been trying to understand from Twitter how many fake or spam accounts are actually on the platform. I’m just as curious.
In the past, Twitter has stated that these types of accounts represent less than 5% of all accounts. Yet Musk’s estimates are around 20% of all accounts.
Oddly, Twitter has failed to produce any credible proof that its own estimates are correct. Musk has threatened to terminate the deal if it doesn’t.
The media is suggesting that Musk is trying to back out of the deal. They’re wrong.
Musk knew in advance of the offer that the number of fake accounts was much higher, but he based his offer on Twitter’s public estimates. This was intentional. Had he not, it’s unlikely the offer would have been accepted by Twitter’s board.
The number of real daily and monthly active users (& user growth), and the average advertising revenue that they drive, are the key metrics that determine the valuation of a company like Twitter. If 20% of the accounts are fake, Twitter is materially less valuable than Twitter represented. That would be grounds for Musk to renegotiate on price.
There Is A Perverse Incentive Here
Twitter has always been motivated to use a methodology to underestimate the number of fake accounts on its platform. After all, the larger the perceived audience, the more advertisers are willing to pay to access Twitter’s data. And more users drive higher valuation, and thus a higher share price.
Given that Twitter has been less than transparent with its data and defensive in its positioning, it smells like Musk is on to something big.
The thing is, Musk will win no matter what happens.
If Twitter comes clean and opens up its data to Musk, the deal will be renegotiated at a lower valuation… Musk wins.
And if Twitter continues to refuse to share the data and to obfuscate this issue, Musk has the legal grounds to walk away from the deal. That way, he’s not overpaying for Twitter.
And I seriously doubt that Twitter would prevail in receiving the $1 billion breakup fee… Again, Musk wins.
A Breakup Would Be Bad For Twitter
The severity of its problems with fake and spam accounts would be front and center in the argument. More studies would be run to reveal the severity of the problem. In fact, the attorney general of Texas just launched an investigation into Twitter into exactly this problem.
Twitter needs to come clean, and it needs to get the deal done. It wouldn’t be treated well by the free markets if the deal fell through.
And we need it to go through. These negotiations with Twitter have revealed how badly Twitter needs to be cleaned up.
Not only does it need to discontinue its business practices of censorship, banning of real accounts, suppressing healthy debate, and manipulating information; it needs to get rid of these fake accounts that have been allowed to proliferate on the platform.
It has been fascinating to watch these negotiation dynamics play out in real-time, and that wouldn’t have been possible without Twitter.
New Opportunities Are Emerging For Citizens of The World.
Freedom and democracy may appear to be struggling to stay alive in America, but there may be a knock-out punch ready to be released. The evolution of the blockchain-enabled metaverse is going to enable the 'Citizens of the World' to gain their own Freedom by democratizing power and creating a new world with new rules, new players, and new opportunities. For 99.99% of us, the metaverse will improve our real-world lives through the democratization of power and opportunity.
Along with the major long-term trend of society towards decentralization and smaller-scale organizations, there are new opportunities developing to help 'Preparers' in the cryptocurrency sector. Businesses are beginning to issue their own Crypto Coins that can be traded on Cryptocoin Exchanges.
Markethive.com for example will be releasing its HiveCoin (HIV) in the coming weeks. It has tremendous upside potential that is outlined in a Video by Founder Tom Prendergast, "Entrepreneur Advantage…".
Not only that, if you go to their website and register as a FREE Member, you will be given 500 HiveCoins for "FREE" along with access to several Earning Opportunities and online tools to increase your HiveCoin balance.
Be sure to check it out today – Markethive.com
Tim Moseley