What Twitter could do as a privately held company: AP explainer

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One important change for Twitter users is that the company would likely have more freedom to make big or unpopular changes.

Here’s a look at what it means for a company to go private.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 U.S. regulators every three months to show how much money it’s making. It also likely wouldn’t have to announce changes to its strategy or operations that are big enough to materially change its fortunes.

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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