According to a new study, one out of every five tweets regarding Tesla over the last ten years was generated by a bot, and Tesla may have utilized Twitter bots to influence its stock price (1). It indicates that prominent stakeholders with excessive influence can easily manipulate popular websites.
According to a survey conducted by Edelman’s Trust Barometer in 2022 (2), in the United States and Canada, trust in technology businesses has continued to erode while it has increased in the rest of the world.
The drop in confidence comes as pressure mounts on regulators and policymakers to tighten regulations on the industry and its alleged abuses.
Below are some of the major findings of the survey:
- Globally, the tech industry continues to be the most trusted industry of business, with 74% of those serviced putting their trust in it ahead of education and health care. On the other hand, social media is the least trusted industry, with only 44% of respondents trusting it.
- However, only 54% of Americans trust tech businesses to do the right thing, down three points from last year and 19 points since 2019.
- In the United States, trust has declined in various highly debated areas, including 5G, AI, IoT, and virtual reality.
- Those with greater salaries were more likely to trust technology than those with lower incomes. Last year, though, the margin decreased, with lower-income Americans gaining trust and the wealthiest losing it.
- Only 49% of Republicans and 50% of independents said they trust tech businesses, compared to nearly two-thirds of Democrats.
“When you evaluate the trajectory of confidence in tech in international events, it makes perfect sense,” said Dan Susong, Chair of Edelman’s US Tech Sector (3). “I believe technology can, and will, reclaim confidence if it is committed to greater awareness — about what it is and what it pursues.”
With public mistrust of big tech at an all-time high, a migration of users to smaller, more trusted communities may be on the cards.
Troubles with Twitter, Bots, and Tesla
Tesla lost 5.7 billion USD from 2010 to 2020, but its stock price soared to unimaginable heights.
A survey of 186 Tesla-focused bots suggests that the stock rose 2% after each one was launched. Operational outcomes appear to be largely dissociated from the company’s 1 trillion USD market valuation, suggesting that bots may have played a large part in the company’s initial growth (4).
“Such bot activity has played a significant role in the “stock of the future” narrative that has propelled Tesla’s market value to levels far beyond what standard financial analysis could explain,” said David A. Kirsch, a professor at the University of Maryland’s Robert H. Smith School of Business in the initial study (5).
Kirsch, co-author of Bubbles and Crashes: The Boom and Bust of Technological Innovation (6), suggests that in a market obsessed with “meme stocks,” sexy storytelling is considerably more successful than financial research.
“The Tesla story is quite compelling,” Kirsch remarked. Despite the company’s numerous near-bankruptcies, Chief Executive Elon Musk has been able to keep his goal of a planet-saving, world-dominating economic venture alive “to continue selling stock to the general people to keep it fueled. It becomes self-fulfilling at a certain point.”
One of the matters Kirsch and his research assistant, Moshen Chowdhury, are trying to address is if Twitter bots are being deliberately designed to manipulate stock trade.
The issue arises as Elon Musk has made it clear that he intends to use his fortune and massive Twitter following to shape the platform’s future direction and policies. Musk stated last month that he’d be joining the board of directors after purchasing roughly 10% of the company (Suggested Reading: Elon Musk Has a Vision for Twitter, and It Could Change Social Media). However, Twitter disclosed that he’d changed his mind for undisclosed reasons earlier this week.
At the time of writing this article, we also received the news that Elon Musk has proposed to purchase the site for 54.20 USD a share, valuing the social media platform at 43 billion USD. In response, Twitter said that the board is reviewing the proposal and will respond in the best interests of all stakeholders.
Notably, Saudi Prince Waleed Talal has refused to sell his 5.2% stake in the microblogging platform.
“I don’t believe that the proposed 43 billion USD valuation even comes close to the value of Twitter considering its growth prospect. As one of the largest and long-term shareholders of the company, KHC, Kingdom Holding Company, and I reject this offer,” he said.
Musk is a Twitter sensation for regularly sending out messages to his 80 million followers ranging from mundane to absurd, infantile to profane. In 2018, he agreed to a settlement with the Securities and Exchange Commission for allegedly deceiving investors into believing he had a deal to take Tesla private when he didn’t. He is now attempting to get the agreement revoked in court.
A Twitter bot is a fake account that is programmed to ransack the social media site for specific posts or news content such as Musk’s tweets and posts and respond with relevant, preprogrammed tweets like “Tremendous long term growth prospects” or “Why Tesla stock is rallying today” or “Tesla’s Delivery Miss Was ‘Meaningless.'” Bots can also be designed to deliver threatening or insulting messages to their critics.
Although researchers have yet to discover a strong correlation between bot tweets and stock prices, they have found enough “smoke” to continue their process.
It is also worth noting that Twitter periodically cleans up bot accounts, yet estimates suggest that bots still run more than 15% of total active users (7).
And since these bots can be programmed to send threats to critics of businesses or amplify narratives to manipulate stock prices (8), there is a market Musk can use his influence to empower the Tesla-focused narrative further. Especially now with Musk owning over 10% stake in Twitter.
However, manipulative strategies are not limited to Twitter alone. Meta has positioned Horizon Worlds, its new metaverse platform, to allow creators to sell their digital assets and experiences.
At first, it sounds like a path towards creator empowerment; however, this week, Meta announced that it would collect a whopping 47.5% commission on all transactions across Horizon Worlds (9).
Ironically, in the past, Meta and its CEO Mark Zuckerburg had criticized Apple for charging developers a 3% fee on App Store for in-app purchases (Suggested Reading: Facebook’s Ill-Fated Fight Against Privacy as Apple Remains Firm).
In a Facebook post published in November (10), Zuckerberg had stated that Meta is making changes to support metaverse creators evading Apple’s fee.
“As we build for metaverse, we focus on unlocking creators’ opportunities to monetize their work. The 30% commission Apple takes on in-app transactions makes it challenging. Hence, we update our subscription product so creators can earn more,” stated Zuck.
Meta also charges a platform fee of 30% of sales made on its virtual reality system Meta Quest, previously known as Oculus. Moreover, Horizon Worlds will charge a 25% sales fee.
Meta will take a cut of about 47.5% from the sale price, leaving the seller with only 52.5%.
This calculation was published in Business Insider, and as per its report, a Meta spokesperson has already confirmed that the math is correct (11).
“If a creator sells a product for 1 USD, then the Meta Quest Store fee would be 0.30 USD, fee for the Horizon platform would be 0.17 USD, 25% of the remainder, which would leave the creator with 0.53 USD before any applicable taxes,” said the spokesperson.
“Over time, we aim to bring Horizon Worlds to more platforms hence the platform fee won’t always be going to Meta. As it launches to more platforms such as mobile, we also expect those platforms to charge their separate fee. The Horizon World fee, which is 25% of the remainder, would be applied after the relevant hardware platform fee has been applied,” added the spokesperson.
Vivek Sharma, the VP of Meta’s Horizon, told The Verge (12), “We think it is a pretty competitive rate in the market. We believe in the other platforms being able to have their share.”
On Wednesday, Amazon told its US third-party sellers that it is adding a 5% surcharge to its delivery fees to offset inflation and rising fuel costs. The fee will take effect on 28th April and will be applied to US sellers using the company’s logistics network to deliver products, called Fulfillment by Amazon. Amazon clarified that it is not intended to be permanent, and it won’t be directly passed on to consumers.
“The fee will be added to the per-unit delivery cost and not the overall product price,” said a spokesperson from Amazon (13). For example, the cost of delivering a shirt would increase from 5.07 USD to 5.32 USD; the average rise would be 24 cents per package.
Although the ecommerce giant has not disclosed the number of packages, it ships, as per an estimate from MWPVL, a logistics consultancy firm, Fulfillment by Amazon sent 3.25 billion packages from third-party sellers to customers in the US last year.
Also, the surcharge does not apply to deliveries made by others like the UPS, US Postal Service.
Amazon said in a note to sellers on Wednesday that it had previously absorbed some of the rising expenses of conducting business, such as hiring over 750,000 additional employees, raising wages, and rapidly expanding its storage footprint.
“We expected a return to normalcy in 2022 when Covid-19 constraints around the world relaxed,” the statement continued. “However, gas prices and inflation have caused further hurdles. It is still uncertain whether these inflationary expenses will rise, fall, and how long.”
The latest move is one of several Amazon has made to offset increased costs of its logistics operations. In February, it announced a hike in the price of its Prime Membership (14). At the time, the company said that the change was made in part because of the rise in wages and transportation costs.
The latest move can add to the strain between Amazon and its millions of third-party sellers, whose products make up about 56% of its total units sold on the ecommerce store in the last quarter.
“I threw my hands in the air. I mean, what is next for sellers? Amazon is in an insurmountable position to do whatever they want,” said Jason Boyce, CEO of Avenue7Media (15).
Notably, Amazon is already under several scrutinies for alleged monopolistic practices, tax invasion, and unethical treatment of its employees and consumers and is subject to a global boycott called by Ethical Consumer (16).
Trust Issues With Tech Giants
It is also no secret that influencers and businesses regularly purchase thousands of fake followers on Instagram and TikTok to sway public opinion.
As we mentioned, only 54% of the population in the US trusts that big tech giants would do the right thing with their power. At the same time, some also say that the convenience they offer would outweigh concerns (17).
Others believe that if these tech companies improve user authentications, they could build more trust among people.
Twitter recently started to roll out bot labels (18). However, it could be only a drop in the bucket.
As we mentioned in our article Google Search Losing Popularity, Here’s What We Think Would Replace it. The door is open for micro-communities, platforms run by users that offer people confidence in the individuals they interact with on the internet (19, 20).
Smaller communities that allow people to self-govern may be the only sustainable road forward as the challenges with distributed networks become unsolvable.