Not a lawyer, so could you explain why this is banana-pants insanity? There's malicious fraud (unlikely) and then there's the more likely case of under-investing in bot-detection and expunging efforts, e.g. "in favor of other priorities", to keep DAUs and subsequently valuations high for a potential sale.
First, only Twitter knows which users are active (the population being analyzed are the DAUs). People doing bot analysis from publicly available define activity based on the account tweeting, which will probably skew heavily toward spam bots.
Second, the mDAU metric is the DAUs with known bots having been removed. Nobody outside of Twitter knows which active accounts were excluded by Twitter from the metric. Even if 50% of Twitter DAUs are bots, as long as Twitter detects 90% of them as bots and marks them as non-monetized, the 5% number stands.
Third, nobody outside of Twitter can actually do a proper job of evaluating whether an account is a bot, since they have orders of magnitude more signals than a simple tweet stream / public profile information.
Twitters methology is far better than any publicly available bot detection would be, but the flipside is that it's not a replicable methodology.
So it cannot be replicated by third parties, and Musk does not know what he’s talking about (shocker!), but it can be verified a posteriori. And I assume it will be at some point.
Maybe Musk hopes to find something in discovery to discredit the process, e.g. evidence of the process not being followed, or of the numbers being tampered with.
Indeed. But surely they have at least internal audits. They seem like they take this stuff seriously.
> I look forward to finding what kind of a kook Musk finds as his expert
Indeed! If he picks his experts like his lawyers, this could be spectacular.
> e.g. evidence of the process not being followed, or of the numbers being tampered with
Yeah, he sounds like he’s hoping to find a smoking gun where some Twitter higher-up admits fudging the numbers. To be fair, if that is true, then Twitter deserves to be raked over the coals, even though it would not be sufficient to get Musk out of this mess.
This is true of most material statements provided by companies in every industry:
- Revenue? Trust the company, I cannot independently verify from outside the company.
- Retail same-store sales comparable? Have to trust the company's numbers.
- Headcount? I have to trust their number again here.
- Expenses? I have no way to verify this unless I work at the company, in a very senior position.
Outside verification of data is not a concern relevant to corporate disclosures.