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Twitter delisting: What do TWTR investors need to know?

By Jenny McCall


Updated

A image of Elon Musk and the Twitter logo
TWTR will delisted from the New York Stock Exchange (NYSE) on Friday - Photo: Getty Images

It was a deal which kept everyone on the edge of their seats and tweets. Tesla (TSLA) boss and billionaire Elon Musk came through on his word this time and is about to be the owner of social media site Twitter (TWTR). Taking the site private, as per a delisting notice from the New York Stock Exchange (NYSE), TWTR was removed on 28 October 2022.

Musk has some big plans for it. Already he has fired Twitter's CEO Parag Agrawal and has become the groups interim CEO. 

Musk also fired several other executives, including head of legal, Vijaya Gadde, who was instrumental in removing the former US President Donald Trump from TWTR. 

The TSLA boss has also created a stir online by requesting that all users with the Twitter verified blue check pay $8 (£6.97) a year to keep their blue tick. 

Could Musk now look to revoke Trump's ban? Who knows, but what is key, is how this public to private journey will affect investors.

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Twitter (TWTR) share price chart

Long and winding road of the Musk/TWTR saga

Musk flirted with the idea of owning TWTR back in March. Contacted members of its board, including co-founder Jack Dorsey and informed them he would either buy up shares, join the board, take TWTR private or start a competitor company of his own.

Unlike most tech stocks, TWTR stock price has been up 41% since March, when Musk first showed interest.

On 4 April it was revealed in a regulatory filing that Musk had become the company’s largest shareholder and had acquired a 9% stake, worth $3bn (£2.5bn).

TWTR responded to Musk’s commitment by offering him a seat on its board, but then TWTR announced a few days later that this would not be happening after all.

Musk then followed up with a bid to buy the social site and inserted what is commonly known as a “420” marijuana reference into his price of $54.20 per share. Selling $15bn worth of Tesla (TSLA) shares to help fund the purchase, alongside help from investors in Silicon Valley, such as Oracle co-founder Larry Ellison.

But the journey was far from smooth and the dance between Twitter and Musk continued.

Muskpublicly condemned one of TWTR’s top lawyers and in July Musk made a U-turn and backed out of the deal, claiming that TWTR had not been 100% honest when addressing the problem of bots, which are fake accounts.

Twitter then sued Musk and accused him of making excuses because they believed he had buyer’s remorse. Two weeks before a five-day trial would begin, Musk changed his mind, backtracked, and said he now wanted to buy the social media site.

Now, fast forward  to October and TWTR will be delisted from the New York Stock Exchange (NYSE) on Friday.

Musk plans to make some big changes at TWTR and its employees know it, many have already left in the last quarter and gone to work for Google (GOOG) and Meta (FB), according to a report by Business insider. In addition, 579 employees have left TWTR recently and it has been revealed that Musk intends to cut 75% of Twitter (TWTR) staff.

Further evidence indicating that TWTR maybe a sinking ship comes from a report conducted by Reuters, that shows how Twitter (TWTR) is struggling to keep most of its active users engaged. The report is called “Where did the Tweeters Go?”, and shows that heavy tweeters, those who log in 6-7 days per week and Tweet 3-4 times, have been declining since the Covid pandemic. These tweeters make up just 10% of overall users but generate 90% of all tweets and 50% of TWTR’s global revenue.

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Musk says 'you're fired'

Musk is on a mission to create value with Twitter, meanwhile cutting costs. Over the weekend, Musk fired more than 90% of its staff in India, as part of a move to reduce costs. This has depleting its enegineering and product staff massively. 

The Tesla (TSLA) owner has also tweeted about possibly turning Twitter into  an online “town house” using an app known simply as X.

So, what do investors need to know.

What happens to stock once a company goes private?

Once the buyout has been approved by shareholders and it goes private, the company which has made a tender offer to buy the business will purchase all outstanding shares at a specified value.

What happens to my TWTR shares once it is delisted?

Shareholders who own stock at the time of it going private earn cash for their positions and the rate is agreed upon.

Outstanding share payouts: What they mean and how to get them?

If you own shares in a company going private, when the transaction closes, you’ll get a cash payment, which is reflected in your brokerage account and is based on the share price of the transaction.

So, if you own 50 shares in Twitter (TWTR), you’ll receive $2,710 when the deal is complete, based on Musk's offer price of $54.20 per share.

Can I sell my shares?

You can buy and sell shares right up to the date the stock is delisted from the exchange.

Can shareholders stop a buyout?

Investors can reject the buy-out offer, but institutional investors have more impact on the final vote. In addition, companies can legally act if an investor rejects the offer to buy outstanding shares and go private But once the buyout has been agreed, shareholders are not able to stop it.

Can you buy a stock after its public-to-private announcement?

The simple answer is yes. You can buy stock before it officially goes private. But you should look at the buy-out offer before deciding to embark on this course of action.

You should look at the cash value that is being offered for the company in exchange for shares. As well as the current value of the stock.

I was a Twitter shareholder, when will I receice my payout? 

According to reports those who had shares in Twitter will receice their payout soon - if not already. 

 

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TSLA
Tesla Inc (Extended Hours)
175.65 USD
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GOOGL
Alphabet Inc - A (Extended Hours)
176.49 USD
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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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