M1 Blog > Insights > When a publicly traded company goes private

When a publicly traded company goes private


A week ago, Elon Musk bought Twitter. Today, we’re breaking down the deal, covering details you may have not heard about, and explaining what happens to investors’ shares when a public company goes private.

We’re also talking about:

  • Investing in foreign companies
  • Why you should write, no matter your profession
  • The most effective way to learn anything

TWTR SHARES

Last Monday, Twitter (TWTR) accepted Elon Musk’s bid to buy the company. During the dramatic negotiations, Musk became Twitter’s largest shareholder, declined a board seat, and skirted a poison pill.

The roughly $44 billion purchase is one of the largest activist investor takeovers of a publicly traded company. Under the terms of the deal, Twitter will become a private company and buy out shareholders at $54.20 per share.

Whether or not you’re currently invested in Twitter, here’s what happens when a company is taken private.

First, the board must negotiate a takeover deal with the activist investor (in this case, Musk). They then host a vote for shareholders to accept or reject that deal. Any investor who owns voting stock can vote, and those with larger holdings receive more voting power.

Twitter accepted Musk’s deal and issued a tender offer to its shareholders, requesting to purchase all outstanding stock at $54.20 a share.

Takeover deals like this can take months to complete. If it goes through, Twitter will be delisted from the stock exchange and no longer publicly tradable. And its shares? Investors will receive automatic cash payouts in their brokerage accounts.

Learn more about corporate actions >>


INVESTING IN GLOBAL STOCKS THROUGH ADRs

Invest in foreign companies, like Nintendo, Nestle, and Roche, through ADR offerings on M1.

BUILDING A VALUES-BASED PORTFOLIO

Socially responsible investing can grow your wealth and support companies that share your principles.


This week, take a moment to focus on:

Your writing: A form of mental weightlifting, writing can test your intelligence and improve your ideas. Use these tips to shape up your words.

A framework: “Explain it to me like I’m 12” is actually an effective way to learn. Developed by Nobel Prize-winning physicist, try the Feynman Technique to learn anything.

A quote: “Excellence is an art won by training and habituation.” – Aristotle


Sign up for M1 to receive The Investor’s Mindset in your inbox every Monday.

Manage your money with M1

Invest, borrow, and spend on one intuitive platform. Customize your strategies, automate the big picture, and let The Finance Super App®️ take care of the day-to-day. M1 gives total control for your wealth today and tomorrow.

Sign up now
Example of the M1 Finance pie displaying how slices are divided
More About
Office workers sitting at desks in an open-concept office
Insights May. 16, 2022 How companies prepare for economic volatility

Spring is here, but many companies are fattening up their cash reserves to make it through the bear market. Today, we’re discussing how companies prep for times of economic uncertainty and what […]

People sitting and working at tables in a busy office with text that reads "Weekly Wrap Up, market recaps every Friday"
Insights May. 13, 2022 The US financial system’s top 4 vulnerabilities

How are you spending the only Friday the 13th of the year? We’re mirroring the markets mood by sharing the Fed’s Financial Stability Report and listening to “Superstition” on repeat.  Today’s edition also covers:  […]

Photo of a person's hands over a balcony
Insights May. 11, 2022 How M1 thinks about market volatility and market corrections

After multiple days of stock declines, even the most disciplined long-term investors get concerned. We want to take a moment to share how we think about downturns and volatility at M1. For […]

Check the background of M1 Finance LLC on FINRA's BrokerCheck

By using this website, you accept our Terms of Use and Privacy Policy and acknowledge receipt of all disclosures in our Disclosure Library. All agreements are available in our Agreement Library. M1 relies on information from various sources believed to be reliable, including clients and third parties, but cannot guarantee the accuracy and completeness of that information.

M1 refers to M1 Holdings Inc., and its affiliates. M1 Holdings is a technology company offering a range of financial products and services through its wholly-owned, separate but affiliated operating subsidiaries, M1 Finance LLC and M1 Spend LLC.

M1 Plus is an annual membership that confers benefits for products and services offered by M1 Finance LLC and M1 Spend LLC.

All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future performance. Using M1 Borrow’s margin account can add to these risks, and you should learn more before borrowing. Nothing in this informational site is an offer, solicitation of an offer, or advice to buy or sell any security and you are encouraged to consult your personal investment, legal, or tax advisors.

Brokerage products and services are not FDIC insured, no bank guarantee, and may lose value. Brokerage products and services are offered by M1 Finance LLC, an SEC registered broker-dealer, Member FINRA / SIPC.

M1 is not a bank. M1 Spend checking accounts furnished by Lincoln Savings Bank, Member FDIC. M1 Visa® Debit Card is issued by Lincoln Savings Bank, Member FDIC.

Credit Card not available for US Territory Residents. Review Cardholder Agreement and Rewards Terms for important information about the Owner’s Rewards Card by M1. The Owner’s Rewards Card by M1 is Powered by Deserve and issued by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.

200 N LaSalle St., Ste. 800 Chicago, IL 60601

© Copyright 2022 M1 Holdings Inc.