EXPLAINER: What Twitter could do as privately held company

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NEW YORK -- If Elon Musk and Twitter get their way, the company will soon be privately held and under his control.The most obvious immediate change would likely be Twitter's...

NEW YORK -- If Elon Musk and Twitter get their way, the company will soon be privately held and under his control.

One important change for Twitter users is that the company would likely have more freedom to make big or unpopular changes. That's because it wouldn't have to worry about potential blowback from Wall Street.If the merger closes as planned, Twitter investors would get $54.20 in cash for each share they own. Those shares would then be canceled and cease to exist.Twitter would likely no longer have to file documents with US regulators every three months to show how much money it’s making.

Investors often send a stock price lower if they think a company's decision is wrong, or at least being made at the wrong time. And the fiduciary duty of the board of directors for a publicly traded company is to generate a return for its investors. Both private and public companies “can do whatever they want, but there will be less blowback for privately held companies because a shareholder can’t complain because there are no other shareholders,” said Harry Kraemer, a former CEO and chairman of Baxter International who is now a professor at Northwestern University’s Kellogg School of Management.

 

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