Elon Musk Could Roll Twitter Into a New ‘Super Company.’ What That Means for TWTR Stock.

It has been a volatile month for shareholders of Twitter (NYSE:TWTR) stock.

Twitter (TWTR) logo displayed on a smartphone screen with a hand ready to use the app
Source: shutterstock.com/khak

Yesterday, Elon Musk disclosed his plans for financing a potential TWTR stock acquisition; the Tesla (NASDAQ:TSLA) CEO is willing to purchase the social media platform for $46.5 billion in debt and equity. Out of that sum, Musk would personally put up $21 billion. The remaining $25.5 billion would then come in the form margin loans and debt financing. A group of banks led by Morgan Stanley (NYSE:MS) has stated they would lend the Tesla CEO the money.

Now, new details on how Musk plans to acquire Twitter have been disclosed. Let’s jump right in — here’s what investors should know moving forward.

What Will X Holdings Mean for TWTR Stock?

This week, Elon Musk registered three companies in Delaware to help with his Twitter acquisition. The first company, called X Holdings I, would become Twitter’s parent company if the acquisition plans are successful. The second company, called X Holdings II, would merge with Twitter in the event of an acquisition. Finally, X Holdings III would be used to fund the acquisition.

These newly created companies have stirred speculation that Musk may also be planning to merge all of his companies under one big company. This is because, in 2020, investor Dave Lee tweeted that Musk should form a holding company called X to house all of his businesses. Musk promptly responded, “Good idea.” Musk also already owns the rights to “X.com.” The Tesla CEO has not yet commented on whether he plans to bringing his companies under one holding company.

However, in a TED Talk last week, Musk did caution that creating a holding company would be “tricky.” This is because the investor base of his existing companies are “quite different.” In addition, Musk would have to “separately acquire SpaceX, Neuralink and Boring” because they are private companies.

What Will Happen to Twitter Under Musk’s Control?

Elon Musk has not yet released a detailed plan on how he will preside over Twitter if the acquisition proves successful. That said, he has disclosed a few changes that he would likely enact via the platform.

Specifically, Musk stated that he would lower the board’s salary to $0 and “authenticate all real humans.” He also addressed the prevalence of spam bots on the social media platform, promising to “defeat the spam bots or die trying!”

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/elon-musk-could-roll-twitter-into-a-new-super-company-what-that-means-for-twtr-stock/.

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