The Beginning Of A Musk Controlled Twitter Era

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Elon is in. Let him drown

The world’s famous eccentric billionaire and social media influencer, Elon Musk has officially taken control of Twitter
A social media platform for microblogging and social networking services. Now a new era has begun for Twitter. Twitter is going to be privately held and it will go dark.

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After months of floundering, taking postures and making public demands, Musk finally bowed. Basically they had no option but to complete the deal as they had signed a contract. Contracts are risk-shifting instruments. A change in the profitability of the contract for a buyer is not an excuse for non-performance. In merger agreements, the parties pre-negotiate who will take what risk. Simply put, Once Twitter turned to the Delaware Court of Chancery, with Musk feeling there was no way out of the deal.

So let’s discuss – what’s next?

What happens to the employees?

News outlets had already reported that Musk fires top Twitter executives, it is not surprising. This is actually very common in M&A deals. The acquirer usually replaces the top management with his/her choice.

There were also rumors about this week Rank and File Twitter Employee Dismissal, The important question that most Twitter employees currently fear is – who lives and who moves? What factors play an important role in deciding Musk’s future?

What happens to the company?

Twitter is a publicly traded company, but will become a privately held company once the deal is completed. Twitter shares are bought by Musk – the investor who bought the company. The company is then going to be delisted from the stock exchange, here – the NYSE, where Twitter’s shares were previously traded. Following these steps, Twitter shares cannot be publicly traded unless there is a new IPO.

What happens to the shareholders?

Twitter’s shareholders agreed to accept Musk’s offer, and therefore, it would be bought. Basically, they give up their ownership in Twitter in exchange for money for each share.

What about public information and SEC reporting?

A stock exchange will generally delist the shares of a listed company upon notice to the exchange by the issuer. Following the delisting process, Twitter will remain subject to SEC reporting requirements until further steps are taken to eliminate the company’s SEC reporting obligations. At the end of all this, there will be darkness on Twitter.

What about CFIUS?

Might start a CFIUS review, I’m not sure. But, even if it does, the deal is unlikely to be stopped at this point, and will not happen until the deal is completed.

If CFIUS is concerned, they can either buy Musk out of the company by buying out those investors. Theoretically, they could have optionally required him to completely separate from the company. This is a real nightmare scenario and very unlikely at this point.

To conclude, what is the future of Musk-controlled Twitter? Only time will tell.

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