What if you already own stocks — and should you invest in them while you can?
But given Musk’s plans to take the company private, how has the deal affected stock prices, and what will happen if you currently own shares in Twitter Inc.?
Here’s everything you need to know.
What happened to Twitter’s stock price?
Twitter Inc stock prices rose 5.7% to $52 per share after agreeing to sell itself to Musk.
While the stock has risen sharply since Musk’s bid, it’s still well below the high of $77 a share it hit in February 2021.
What happens to my inventory?
Under Musk’s proposal to buy the company, he plans to take it private.
Privately held companies are not listed on stock exchanges and their shares cannot be bought or sold publicly. They are often owned by a family or a small group of shareholders.
If the deal goes through (there’s still plenty of legal wrangling to be done before it’s 100% confirmed), Twitter will be delisted and no longer available for public trading.
Musk said on Twitter that he would “try to retain as many shareholders as possible [a] Twitter privatized as permitted by law,” but what does it mean for you if you’ve already invested in the social media network’s stocks?
At some point in the sale process, Twitter will propose a “takeover bid” for at least 20 days.
Essentially a public offering for shareholders to sell their shares at a specific price — $54.20 per share in this example — the tender offer represents the company’s desire to purchase all of its outstanding shares.
The United States’ Jumpstart Our Business Startups Act (JOBS) of 2012 allows Twitter to have up to 2,000 private owners without having to comply with Securities and Exchange Commission (SEC) regulations.
However, the majority of investors will receive automatic payouts when the company is officially privatized, deposited into the account used to purchase the shares.
Should I Buy Stocks on Twitter?
Until then, Twitter Inc shares are still publicly available for trading.
And with a $54.20 takeover bid in the works, it will be tempting for many investors to buy shares now (even though they’re lower than that number) in hopes of making a quick profit.
Your risk tolerance should determine whether you should buy stock in a company that may be going private and consider contacting a professional who can help you weigh the pros and cons.
Share prices could rise ahead of the bid, making it a money loser for current investors.
What changes will Musk bring to Twitter?
To encourage openness, Musk has said his first plan is to make the algorithm that ranks tweets in the content feed open source, meaning anyone would have access to it.
He has also indicated that he intends to eliminate spam bots and authenticate all legitimate users of the site.
Musk also proposes creating an edit button to allow users to edit their tweets after they’re published, and transforming Twitter’s San Francisco headquarters into a shelter for the homeless.