Twitter is popular because of how quickly you can learn about what’s happening anywhere, in real-time. After starting in 2006, the micro-blogging website went public in 2013. Its Initial Public Offering (IPO) of $45.10 helped the company raise $1.8 billion. Elon Musk, an ardent admirer and user of the platform, expressed his interest in buying the social media network. The $44 billion deal went through on October 27, 2022. However, the buyout wasn’t plain sailing, as Elon Musk attempted to back out several times. Even though Elon Musk made the company private, is Twitter on the stock market? Can you find and buy Twitter stocks on any exchange and become a shareholder?
What about its market cap? As a Twitter user, you may have several questions about this deal. After all, it can influence your experience on the platform. For instance, Elon Musk promised to bring several revolutionary changes to the social media network. Today, let’s learn everything about the buyout and what you can expect from the platform in the future.
Is Twitter Delisted From the Stock Market?
The first thing Elon Musk did after taking over Twitter was make it a private company. As highlighted earlier, the stocks for the micro-blogging website were available to the public. What does this mean? To be a shareholder, you can purchase Twitter stocks. They were available on the New York Stock Exchange (NYSE). As the company is now private, it brings you to the question, “Is Twitter delisted from the stock market?”
The short answer is no—you can no longer buy Twitter stocks from any stock exchange. A few hours after the buyout, NYSE stopped trading Twitter stocks. This happened before the market opened the next day, i.e., October 28, 2022.
However, you could still see Twitter stocks on NYSE, just that you couldn’t buy them. This brings you to the next question “Is Twitter on the stock market?” On November 8, 2022, NYSE removed the social media network from its listing.
Twitter Stock Market: What Happens After the Delisting?
You want to know what’s in store for the shareholders after learning more about “Is Twitter on the stock market?” After all, the social media giant was a public company before the deal. Usually, when stock delisting takes place, you can’t purchase or sell the shares on the platform. In this instance, you won’t see Twitter stocks on NYSE.
So what can the shareholders do after the delisting? Generally, delisted stocks come under over-the-counter (OTC) stocks. In other words, no stock exchange recognizes these shares. Shareholders can trade these stocks even though it’s not available on any stock exchange. But the downside is that they may not get a fair value for their shares. Also, due to lower levels of regulation in OTC stocks, the trades are vulnerable to scams.
Fortunately, Twitter’s stockholders won’t face this issue because the delisting was due to a takeover. First of all, 98% of Twitter’s shareholders favored the buyout. After the successful deal, they’ll get $54.20 per share, despite the market closing it at $53.70.
As most shareholders use brokerage agents, they will handle everything for their clients. All the shareholders have to do is wait to receive the money from the deal.
What Is Twitter’s Market Cap?
You know the answer to “Is Twitter on the stock market?” The next natural question is what is Twitter’s market cap during the takeover. Before the buyout by the billionaire investor, the social media network’s market cap was $41.094 billion. The stock price was $53.70 per share, lower than what Elon Musk promised to pay Twitter’s shareholders.
The billionaire investor’s initial offer of $44 billion worked out to $54.20 per share. Although fluctuations are standard in the market, there were drastic swings during the Twitter takeover.
Why did this happen? To understand this, you must go back to when Elon Musk became Twitter’s biggest shareholder on April 4, 2022. When news broke out, there was a significant bump in the social media network’s share price. He bought a 9.2% stake in the company for $2.9 billion. But, due to the increase in share price, it was worth over $3.5 billion.
Instead of joining Twitter’s board of directors, he offered $44 billion to buy the company. The social media network was on-board with the deal. As a result, the stock price jumped from $43 to $52. However, the billionaire investor didn’t do his due diligence, i.e., investigate the company to ensure everything was in order. Generally, investors perform this process to ensure they don’t get the raw end of the deal.
Only after his due diligence did Elon Musk realize he didn’t want to proceed with the buyout. However, Twitter went the legal route to ensure the deal went through. Due to the back and forth between Elon Musk and Twitter, Twitter’s share price fluctuated significantly.
Is Twitter on the Stock Market: Who Owns Twitter Now?
The next part of the “Is Twitter on the stock market” series is understanding who owns the social media platform. Yes, Elon Musk is the sole owner of the micro-blogging website. However, all the money from the deal didn’t come from the billionaire investor.
It’s remarkable to note that Elon Musk was able to raise billions of dollars for the Twitter takeover. Despite being the wealthiest man in the world, he needed financial assistance from third parties.
Morgan Stanley, Bank of America, BNP Paribas, Mizuho Bank, MUFG, Société Générale and Barclays provided a portion of the funds. He committed to selling his Tesla stock and approached 19 independent investors. He raised $44 billion for the Twitter takeover by involving several investors and financial institutions.
Qatar Holding, Sequoia Capital, Andreessen Horowitz, Al Waleed bin Talal Al Saud, and Larry Ellison were among the independent investors.
Also, Twitter, Inc. no longer exists after the deal. Instead, it goes by X Corp. Why? Elon Musk registered X Holdings in Delaware to handle the takeover. He also controls X Holdings, which allows him to manage the social media platform.
Twitter Stock Market: Why Is It a Private Company?
Why did Elon Musk decide to make Twitter a private company? Although there are advantages to remaining a publicly traded company, the billionaire investor had other ideas. He wanted to bring about significant changes throughout the company. It can be tricky dealing with public shareholders, especially when everyone is not on board. As multiple stakeholders can influence decisions, introducing changes can be challenging.
Due to the size of Twitter’s acquisition cost, Elon Musk has to pay around a billion dollars in interest. This means he needs to turn things around quickly and make the social media network profitable. He has complete control over the platform by making Twitter a private company. He can shape it to his will and ensure it aligns with his vision.
Although free from public pressure, it doesn’t mean he’s in the clear for a while. All the private investors will be looking to profit from their investments.
Elon’s move is similar to what happened with Dell in 2013. Michael Dell also went the private company route to bring about significant changes. He could rebalance the business and take it in the right direction thanks to his quick action.
Elon Musk is also in the same boat and can change the social media platform’s direction. But where does he want it to go? First, he wants the company to break even, which will be an incredible feat if he pulls it off.
Also, he wants to transform Twitter into an all-in-one app called ‘X.’ He takes inspiration from WeChat, an app that provides its users with services like:
- Food delivery
- Mobile payments
- Ridesharing
- Social media
While seeing Elon Musk’s ambitious goals is incredible, you should remember that he doesn’t always stick with his plans.
What Is Happening to Twitter?
You wonder what is happening to Twitter after the acquisition. As promised, Elon Musk did introduce sweeping changes to the social media platform. Given below is an account of the billionaire investor’s actions as CEO after the Twitter stock market takeover.
Twitter Stock Market: Decrease the Number of Employees
One of his first moves was to remove the micro-blogging website’s top executives from the company. He let go of Parag Agarwal, Vijaya Gadde, Sean Edgett, and Ned Segal. He became the CEO of the company and the only member of the company’s board of directors.
His next move was to trim the hedges, which in this instance was to reduce the size of the workforce. Almost 75% of the employees were no longer a part of the company. This was a combination of firing the workforce and some staff resigning.
As several departments no longer had the employees to function, there were concerns among advertisers, especially about content moderation. Abuse and hate speech were rising, so several companies stopped advertising on the platform. Remember, 90% of Twitter’s revenue during the second quarter came from advertisements. Out of Twitter’s top 1000 advertisers, only 43% run ads on the platform.
With these drastic actions, he reduced the company’s costs to $1.5 billion. Before the Twitter stock market takeover, the platform’s expenditure was $4.5 billion.
Overhaul the Verification System
As CEO, he revamped the platform’s verification process for the iconic blue tick. He introduced Twitter Blue for $8 a month. It is a paid subscription service that offers exclusive features to Twitter users. He launched the yellow checkmark for organizations for $1000 a month. Similarly, he also introduced the gray checkmark. This is for multilateral organizations and government officials. How is this related to the Twitter stock market? Well, one of the reasons for offering subscription services was to increase the platform’s revenue. However, there are only 640,000 paying members, which is only a small percentage of Twitter’s user base.
Twitter Stock Market: Timeline Changes
There were also changes to the social media website’s timelines. Instead of showing posts from accounts and topics users follow, the algorithm decides what they see. As a result, users get tweets from accounts and topics, depending on their activity on the platform.
After delisting the Twitter stock market, all these changes were part of Elon Musk’s goal to make the company profitable. He also stepped down as CEO and appointed Linda Yaccarino, former marketing executive of NBCUniversal. Although Twitter is no longer public, it will change in the coming years. Remember, private equity firms are part of the 19 independent investors. When they invest in private companies, they aim to take these organizations away from the spotlight. This allows them to make various changes and push businesses toward profitability. Usually, within five years, they make the companies public again.
If you want to buy Twitter stocks, you’ll need to wait a while. Should everything go well, there will be a second IPO from the company.
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