When Does Twitter Go Private? What Will Happen to TWTR Stock?

Twitter (NYSE:TWTR) is in the spotlight after the company announced it had accepted Elon Musk’s offer to take it private for around $44 billion. Under the terms of the agreement, shareholders of TWTR stock will receive $54.20 in cash for every share of common stock they own.

Twitter (TWTR) app being shown on a phone screen held in a person's hand.
Source: Worawee Meepian / Shutterstock.com

The purchase price represents a 38% premium to TWTR stock’s closing price on April 1, which was the last trading day before Musk disclosed a 9.1% position in the company. In order to satisfy the acquisition, Musk enlisted the help of a group of banks led by Morgan Stanley (NYSE:MS) to provide $25.5 billion in financing.

When Does Twitter Go Private? What Will Happen to TWTR Stock?

The transaction is expected to close sometime this year, although a specific date was not disclosed. Furthermore, the transaction is still pending shareholder and regulatory approval. Twitter’s board has already unanimously accepted Musk’s offer.

Since Twitter is going private, TWTR stock will eventually be removed from the New York Stock Exchange. Once removed, the public will not be able to invest into Twitter. Dan Raju, CEO of Tradier, stated that it would be “weeks rather than days” before this occurs. On top of that, Raju states that it’s “hard to guess” when the regulatory process will be completed.

In addition, Twitter is currently trading below its purchase price of $54.20. The difference in price takes into account that the acquisition has not yet been approved by federal regulators or shareholders.

What’s Next For Twitter?

In a statement, Musk explained:

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated. I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”

Spam bots have been a major problem for the social media platform. However, the removal of spam bots could have a negative effect on Twitter by decreasing monthly average users.

Twitter has confirmed that it will report Q1 earnings on Thursday, April 28, before the market opens. The company will not be hosting a call to discuss results.

Some shareholders are speculating that the company will post unsatisfactory results, which is why it accepted Musk’s offer so quickly. Additionally, this could be Twitter’s last earnings report as a public company. With this in mind, investors should keep their eyes peeled when it reports earnings.

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.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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