The U.S. Securities and Exchange Commission is taking another look at Twitter’s claim that less than 5% of its users are spam accounts.
The request to company CEO Parag Agrawal, originally made on June 15, was made public by the Securities and Exchange Commission (SEC) on Wednesday.
“To the extent material, please disclose the methodology used in calculating these figures and the underlying judgments and assumptions used by management,” the SEC wrote.
Bloomberg News reported that the company claimed that it “already adequately discloses the methodology” it uses to determine the number of spam accounts on the platform:
“Twitter said that it randomly selects thousands of accounts to be reviewed by people each quarter and has done so for many years. Reviewers working for the firm use both public and private data to flag an account as fake or spam.”
The SEC also posted a July 27 letter informing the company that it had concluded its review of the matter.
“We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff,” the agency warned.
In the June 15 letter, the SEC also asked Twitter to explain a reporting error related to its daily average users between the first quarter of 2019 to the fourth quarter of 2021. The agency wanted to know how the error was discovered as well as how the company determined it wasn’t a “material weakness” in its reporting.
“Given that the error persisted for three years, please tell us how you concluded there was not a material weakness in your internal control over financial reporting and that your disclosure controls and procedures were effective as of March 31, 2022,” the SEC wrote.
Twitter wrote in a response letter on June 22 that the discrepancy was related to users switching between different accounts and that the overstatement “had no impact on Twitter’s financial statements.”
“The overstatement had no impact on any of Twitter’s key metrics other than mDAU, and had no impact on Twitter’s financial statements,” the company said. “With respect to mDAU, the overstatement represented less than one percent of mDAU for each of the quarters from the fourth quarter of 2020 through the fourth quarter of 2021.”
Earlier this month, NewsBusters reported that Tesla CEO Elon Musk pledged to go through with a deal to purchase the platform for $44 billion if the company provided proof that its reported numbers were accurate.
“If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms. However, if it turns out that their SEC filings are materially false, then it should not,” he tweeted.
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