Elon Musk’s proposed US$44 billion deal to acquire Twitter and take it private is reportedly coming together as a court’s Oct. 28, 2022, deadline nears.
For starters, a public company is widely held, meaning it has a lot of shareholders. Anyone can buy shares of most public companies, their shares trade on stock exchanges, and their market price is widely available on websites and apps. Going privateMany, if not most, companies begin their lives as a private company – perhaps in a family garage, as seems to be the case in so many startup origin stories.
Once the shares change hands, Twitter will be Musk’s to do with as he pleases – from reopening the accounts of former President Donald Trump and Ye, the artist formally known as Kanye West, to slashing the workforce by up to 75%, all of which he reportedly is considering.At the time, the company was struggling as personal computer sales slumped amid the rise of the smartphone.
By 2018, when the company went public for the second time, Dell’s stake was worth $32 billion, with similar large payouts for his co-investors. The company thrived as well, with sales and profits soaring after a period of low growth, as Dell predicted. Workforces often fall when a company goes private, but Dell’s was up about 50% in 2020 compared with 2013.In the early 2000s, Toys R Us was in serious trouble.
In his letter to Twitter shareholders, he said, “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.” One could ask whether that is a business model or a statement of sociopolitical philosophy.