Investors in Twitter Should be afraid. They should be very afraid. In its filings to the SEC, Twitter claimed that less than 5% of its accounts were fake. It now appears that the number is extremely low. So low the SEC should consider it to be a case of fraud. People buy stocks based on their filings with the Securities and Exchange Commission (SEC).
If the reports are faked, then anyone buying that stock has been defrauded. The SEC could take over the company and sell off its assets or sell the entire company to the highest bidder. Newsweek claims that 50% of Joe Biden’s followers are fake. My guess is that the estimate is very low. Elon Musk has already made the claim that he made his bid on Twitter based on their SEC filings. He could withdraw his bid without paying the one billion dollar penalty fee.
Twitter would also be facing monumental lawsuits that they could not possibly win if their numbers are indeed false. The net result is that Twitter could become bankrupt. There would be an opportunity for the right buyer, should that happen. You could be the largest chunk of Twitter for just the discounted price of the equipment. Musk could end up owning a site made up of Twitter equipment for less than half the cost he would pay for the entire company.
Musk tweeted moments ago claiming his offer was based on Twitter filing honest SEC records.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
Unfortunately for Twitter Newsweek reports that half of Joe Biden’s followers are bots.
SparkToro’s tool found that 49.3 percent of accounts following the official @POTUS Twitter account are “fake followers” based on analysis of a number of factors, including location issues, default profile images and new users.
This is not good for Twitter. This is not good at all.