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Op-Ed

Solomon: What if Musk's Endgame Isn't Just to Buy Twitter?

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Elon Musk just announced that his Twitter acquisition is on hold because Twitter refuses to show proof that less than 5 percent of its mDAU (monetizable daily active users) are fake accounts.

Of course, this comes weeks after Musk agreed to the deal. From the time Musk acquired more than 5 percent of Twitter shares on March 14, which triggered an SEC requirement to disclose (that he allegedly missed), Musk has been able to relatively easily manipulate the value of Twitter shares through his actions and inactions.

His exact message was in a Tuesday reply tweet:


Twitter’s position on this issue was clear and also delivered, fittingly, in a tweet:

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Yes, this was indeed the thread that was met with the poop emoji by Musk — a fitting postmodern commentary on so many aspects of his Twitter acquisition.

Here’s an important threshold question: Whatever happened to the notion of due diligence?

The answer may be found by exploring a huge parallel between Musk’s acquisition of Twitter and the growth and scaling of Theranos.

Will Musk's acquisition of Twitter go forward?

With Theranos, some of the most famous investors in the world seemingly collectively forgot how to do due diligence at the same time. They took the word of a recent Stanford dropout as to the abilities and quality of the company’s technology rather than getting answers to baseline questions about how good it was at that point and what its potential would be a month, a year and several years from then.

With Musk’s purchase of Twitter, we are now expected to believe that in acquiring a company worth close to $50 billion, Musk didn’t first get answers about something as fundamental as the percentage of fake, bot or spam accounts the platform has.

So Musk’s argument is that if over 20 percent of users are fake, Twitter isn’t worth $44 billion. Yet if Musk’s goal here is to shame Twitter and drive down its stock only to buy it at a significantly lower price, what’s the future of any corporate acquisition? Can a lack of basic diligence simply be waived with a poop emoji?

As to the actual issue of how many Twitter accounts are actually bots, it’s obviously much higher than 5 percent. Even a neophyte user who posts a tweet that gets even minimal traction would realize this. Aside from sketchy usernames, users much as myself who have been on the platform for over a decade develop decent radar for how these fake accounts look and feel.

Two days after Musk’s pronouncement that the Twitter deal was on hold, Rand Fishkin, founder of SparkToro, posted an important thread on the fake accounts issue:

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Tim George, a Pennsylvania lawyer, raises an important question as to why the parties involved in the Twitter deal have been able to conduct business as they have been.

“So much of what’s being said and done right now in the Twitter acquisition would be of interest to regulators if they wanted to involve themselves in this deal,” he said. “They may be taking their time to fully investigate the scope of errors and omissions in statements and disclosures from both Musk and Twitter.”

The reason this regulation issue is critically important is that Twitter is and will be far more than a social media company; it is by design an influence machine. Just a quick review of the communications between Musk and Twitter over the past week reveals this.

It’s worth considering that the issue currently in the spotlight might be a red herring. Maybe whether 5 percent or 20 percent or 50 percent of current Twitter users are fake isn’t the issue. Maybe The New York Times stumbled upon something much more significant in observing that Musk is “carrying out a public tweet-by-tweet negotiation for the influential social media platform.”

What if this is Musk’s way to determine how much he can use Twitter to affect the value of not only Twitter itself but any other company he might want to buy, sell or take public?

This would be an entirely different endgame for Musk and one that would make Twitter’s purchase price seem small and irrelevant compared to the potential of controlling and directing the power of this remarkable influence machine.

The views expressed in this opinion article are those of their author and are not necessarily either shared or endorsed by the owners of this website. If you are interested in contributing an Op-Ed to The Western Journal, you can learn about our submission guidelines and process here.

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Aron Solomon, JD, is the head of strategy for Esquire Digital and the editor of Today’s Esquire. He has taught entrepreneurship at McGill University and the University of Pennsylvania and was the founder of LegalX, the world’s first legal technology accelerator. Aron’s work has been featured in TechCrunch, Fortune, the Independent, The Boston Globe, The Hill and many other leading publications around the world.




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