Was Twitter Cooking Their Books?

Matt PalumboApril 30, 2022

Has anyone else been suspicious of Twitter’s flip-flop on selling the platform to Elon Musk? I’m sure I’m not the only one. I always felt that Twitter was far less valuable than what Musk was offering and was particularly surprised when a Twitter board member, Saudi Prince Alwaleed bin Talal Al Saud, who is also one of Twitter’s largest shareholders, said that he’d reject Musk’s offer because it was too low.

“I don’t believe that the proposed offer by @elonmusk ($54.20) comes close to the intrinsic value of @Twitter given its growth prospects,” the prince tweeted earlier this month.

This claim never sat right with me. But adding to my suspicion was the sudden flip-flopping of the board to accept Musk’s offer after initially taking steps to prevent his hostile takeover.

So, why did they do it? Money, obviously. But why take an offer that Alwaleed bin Talal, who describes himself as “one of the largest & long-term shareholders of Twitter,” originally dismissed as too low?

To me, the answer is that the board knows that Twitter isn’t worth what Musk is willing to pay for it, and it looks like there might be evidence to back that up.

According to Twitter’s latest financial report, not only did the company not meet revenue expectations, but they also admitted that since 2019, the company has been “over-stating” how many users are on the platform.

“In March of 2019, we launched a feature that allowed people to link multiple separate accounts together in order to conveniently switch between accounts,” Twitter explains. “An error was made at that time, such that actions taken via the primary account resulted in all linked accounts being counted as [monetizable daily active Twitter users] mDAU.”

“This resulted in an overstatement of mDAU from Q1’19 through Q4’21.”

Based on their revised figures, Twitter now admits to having 1.9 million fewer global users in Q4 2021.

That’s by no means a small number.

It seems odd that this admission came after the board accepted Musk’s offer, doesn’t it?

“Is someone covering-their-ass ahead of Musk’s deep-dive?” asks Tyler Durden at Zero Hedge. “And what other little surprises lurk below the surface of this leftist sanctuary?”

Indeed.