In this article, we explain what could happen to Twitter and the employees as it is now owned by Musk.
Difference between public and private company
A public company, or publicly listed company, has a lot of shareholders. Any person can buy shares of public companies and the shares trade on stock exchanges. A private company is closely held and has a few or one shareholder. The shares don’t trade on exchanges so you can’t buy them unless someone wants to legally sell them to you.
With Musk ending up splashing $44 billion on acquisition of Twitter, he will now start delisting the company’s stock and taking it out of the hands of public shareholders in line with the process of taking the social media platform private.
What is means to Elon Musk
With Twitter going private, Musk will have full authority of making, removing or tweaking rules as per his liking. He will not have to make quarterly public disclosures about their performance and Twitter will also be subjected to less regulatory scrutiny.
How is Musk taking Twitter private
Musk established X Holdings in Delaware to handle the deal. The corporate entity is merging with the social media company and is buying out all of Twitter’s stock. Musk will be at the helm of the company.
As per a report in New York Times, Twitter’s shareholders approved the company’s sale in September and agreed to sell their stock to him for the offered $54.20 a share. They can get the cash value of their shares. As mentioned, Twitter will be delisted from the New York Stock Exchange and its shares will no longer trade on public markets as of November 8.
What happens to Twitter board
The current board of directors at Twitter is likely to be dissolved and Musk is expected to make a new board for operations. Reports suggest Musk has already ‘fired’ CEO Parag Agrawal, Vijaya Gadde, top legal and policy executive, Ned Segal, Twitter’s chief financial officer and Sean Edgett, the general counsel. Musk and Agrawal clashed publicly and privately earlier this year.
The New York Times reports that Agrawal may receive $60 million, Segal $46 million and Gadde $20 million.
What happens to employees
Reports suggest that Musk is looking to trim the staff and he could fire up to 75% of Twitter staffers. Twitter has about 7,500 employees globally. With the company going private, the employees will be given cash bonuses.
Repaying of debt
Musk has borrowed a lot of money to purchase Twitter. Banks lent him $12.5 billion and equity investors provided about $7.1 billion for the deal. Musk will have a herculean task of repaying these debts. He may sell branches/ services of the company to pay debts.
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