Twitter has been a publicly listed company since November 2013. Now that Elon Musk is taking over he made clear that he wants to take it off the stock market again. Can he just do that, and what happens when Twitter gets delisted?
Who is Elon Musk?
Elon Musk bought a majority share in Twitter! If this is the first time you’ve heard this, you must have been living under a rock because it was all over the news.
The Tesla ceo paid around 44 billion dollar to become the social media platform’s new majority share holder, an astronomical amount.
Richest man on Earth
Elon Musk is the richest man on Earth. According to Forbes he is worth approximately 250 billion dollar. That means he doesn’t go shopping like I do for new shoes. Nope, Elon shops influence.
Founder of Tesla, SpaceX and Neuralink
People have a lot of opinions about this guy, but the least you can say about him is that he is anything but boring (although he founded “The boring company”, lol). He’s probably best known for his companies Tesla and SpaceX but he also co-founded Neuralink, a company that works on technology that connects an interface to your brain. Musk was also involved in forming Paypal, the online payment technology we all know.
Why did he buy Twitter?
We will have to wait and see what will change on Twitter and the way it works. What we do know for a fact right now is that Elon plans on making Twitter a private company again. Let’s dive a little deeper into that.
Taking a company public
A company can decide to go public and offer shares on the stock market. The reason behind that is usually to raise capital. When investors buy the stocks, the company can use that money to expand or finance a certain project. A company going public for the very first time is called an IPO: initial public offering.
The results of going public is amongst others that the company needs to be transparent about their results. The stock owners get to share in the benefits and losses.
Delisting a company
A publicly listed company can decide to go private again, in other words to stop offering their stocks. The reason for a delisting could be that it is becoming too costly to keep on fulfilling the listing conditions. Another reason could be that the board wants to take back full control of the business. Stock owners can oppose to a decision, so the board cannot just do what it wants the company is public.
A delisting can of course also happen because of bankruptcy. In Twitter’s case, Elon’s motives are to be found in the ‘taking back control’ department.
What happens when Twitter gets removed from the stock exchange?
Whenever a company voluntarily goes private again, it will usually buy all the stocks back. They will offer stock holders a certain price per stock, to which they can agree or disagree. If the majority agrees, the bid will go through and the stocks are delisted. The investors get paid out in cash.
What will happen with Twitter when Elon takes it off the market?
We will have to wait and see, but I think we can expect him to make an offer to the stock holders soon. Earlier he tweeted this:
I know I will stay tuned to see what happens next. But one thing is for sure: with Elon Musk, expect the unexpected 🙃
