How is that under the SECs purview?
Doesn’t really matter. Twitter stock is about to crater. Advertisers pay Twitter per ad view on Twitter. If they have been paying millions and the fake account range is say 20% or even 50 % and Twitter knew that, then they have been committing a crime.
I was wondering the same thing, then I thought, perhaps the SEC would be involved in anything concerning a business that was traded on the stock exchange. This business is basing it’s value and it’s stock price on the average number of users per quarter. If the evaluation is based on vaporous lies and unproven assumptions, there are going to be questions.
Failing to report or falsifying required and material information at the least could result in civil fines and at the extreme could be criminal fraud. If Musk is correct re. the accuracy of claims by Twitter of the number of Bot users then the stock price is going to crash. If Twitter stiffs Musk and refuses to back up their claim with verifiable data then their stock price crashes.
Musk has the Twitter senior management and board of directors in a vise and the screw is tightening. My opinions.
Because Twitter claimed a very low percentage of fake accounts in their own filings with the SEC
The value of the company is based upon earnings projections (think price-to-earning or p/e ratio). Twitter’s earnings mostly come from advertising revenue. Like with television, advertisers pay different rates based on the projected number of people who would see the ad. I’m sure you can see the implications on stock prices if something like over-inflated ad revenue collapses.
Interestingly, since Tesla advertises on Twitter, Tesla Corporation (not Elon personally, but any one or all of his companies) could make a fraud complaint with the Federal Trade Commission as well. Misrepresentation of the number of users would have caused any of his companies to pay waaaaaaay too much in advertising.
I think it becomes an issue for the SEC when Twitter includes "users" in their footnotes re: metrics.
See below from their 10-K (Source):
Key MetricsWe review a number of metrics, including the key metrics discussed below, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
Monetizable Daily Active Usage or Users (mDAU).
We define mDAU as people, organizations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, Twitter applications that are able to show ads, or paid Twitter products, including subscriptions. We believe that mDAU, and its related growth, is the best way to measure our success against our objectives and to show the size of our audience and engagement. Average mDAU for a period represents the number of mDAU on each day of such period divided by the number of days for such period.
Changes in mDAU are a measure of changes in the size of our daily logged in or otherwise authenticated active total accounts. To calculate the year-over-year change in mDAU, we subtract the average mDAU for the three months ended in the previous year from the average mDAU for the same three months ended in the current year and divide the result by the average mDAU for the three months ended in the previous year.
Additionally, our calculation of mDAU is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies.
In the three months ended December 31, 2021, we had 217 million average mDAU, which represents an increase of 13% from the three months ended December 31, 2020. The increase was driven by product improvements, as well as global conversation around current events. In the three months ended December 31, 2021, we had 38 million average mDAU in the United States and 179 million average mDAU in the rest of the world, which represent increases of 2% and 15%, respectively, from the three months ended December 31, 2020
Filing fraud. 100% SEC purview. Enron on steroids. Massive fiduciary duty malfeasance and fraud. Highway robbery of the stockholders.
SEC reports are the basic information upon which stocks are evaluated (priced). Twitter is essentially an advertising business. The number of eyeballs viewing adds is critical to their ad price structure. It would be as if a major retail chain lied about the number of brick & mortar stores it owned — something easily verified but no less important to the revenue potential of that business.
“My offer was based on Twitter’s SEC filings being accurate.”