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What Will Happen to Twitter Shareholders After Musk's Buyout?

Musk has bought Twitter and plans to take it private. Here's what will happen to Twitter shareholders.

After a few weeks of drama, Twitter  (TWTR) -  finally accepted an offer from Elon Musk. Musk has agreed to purchase the company for $54.20 per share — about $44 billion — and take it private.

With the privatization of Twitter, Musk promises to make the platform a bastion of free speech. As well, he says he'll implement new features, improve algorithms, defeat spam bots, and authenticate all human accounts on the platform. That's a tall order.

Besides Twitter, Musk owns several other major companies in many different sectors, including Tesla  (TSLA) - , SpaceX, OpenAI, Neuralink, and the Boring Co.

However, with Musk's hostile takeover of Twitter, what will happen to the company's current shareholders? Is it still possible to acquire Twitter shares?

Here's an overview of what will likely happen.

Figure 1: What Will Happen to Twitter Shareholders After Musk's Buyout?

Figure 1: What Will Happen to Twitter Shareholders After Musk's Buyout?

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What Will TWTR Shareholders Receive?

When a company transitions from a public to a private company, it is delisted from the stock exchange. Current shareholders will be compensated.

In Twitter's case, after the transition is complete, its shareholders will receive a tender offer in the amount paid by Elon Musk — $54.20 — in cash for each common share they own.

Is this a good deal? It depends on the prices at which you've bought your shares. Remember that Twitter hit $77 per share in February 2021.

Thus, if the bid price is lower than the price paid by buyers, those shareholders will have lost money.

On the other hand, buyers who acquire shares at a price below the bid price will receive a nice benefit. Also remember that the cash received for the shares will be considered a taxable event.

Is It Still Possible to Buy More Shares?

Because the transition from public to private is not yet finalized, Twitter shares are still available on the stock exchange, and investors can buy them from their brokers.

Experts indicate that, in public-to-private transitions, the stock tends to be quite volatile between the announcement of the deal and the official delisting of the stock, because shares will be valued mostly according to market buzz.

Currently, TWTR trade just lower than $50. investors and traders need to be aware that buying above $54.20 will imply a loss.

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)