Twitter is now in the hands of Elon Musk, which means that sooner or later Twitter will turn into a privately owned company.
Years before Elon called the CEO and owner of Dell Technologies, Michael Dell in a hope of getting some advice about making a company private. Dell then said although the process of making something private is difficult, once it is done, it is going to be the best decision one can ever make.
At that time, Elon was trying to take Tesla private. Although he did not make it then, he will take the advice of Dell in making his other company, Twitter Inc private.
What will happen to Twitter?
As the deal completes, investors of Twitter will get $54.20 per share and they can assert the cash value of their shares. Twitter shares will no longer be available for trade in the share market for the public. It will be delisted from the New York Stock Exchange itself.
What difference does that make?
By making twitter private, it will give freedom to Elon to make any changes without announcing the changes to the public. It comes with the risk of getting sued if they don’t announce. Also from now on it will not have to publicize the performance of the company quarterly.
Eric Tally, a law lecturer at Columbia University said “The biggest distinction is that Musk as an owner would be beholden to his own desires or to his and whatever remaining shareholders are still around, rather than to the wide investor base that it has now.”
Furthermore, the board of directors of Twitter will discontinue their work and a new team of nine members will take over their place. The new board of directors is likely to be the co-investors who helped Elon to complete the deal. The overall system would be what people call a “friendly dictatorship”.
Elon has already terminated the former CEO and several other executive members. He may even terminate some employees and staff. Their compensation is likely to be changed as they won’t be able to sell the shares in the market.
Since the company is going to be private, it will be less transparent to the world. However, Elon may have to face internal pressure from banks who aided him in need and from other co-investors, if he doesn’t clear it beforehand.
