What does it mean for Twitter to become Public to Private?
This question will also be in your mind what is the meaning of Twitter becoming a private company from a public company? Will its governance and functioning structure change? How will this affect its board, employees, and investors?
Elon Musk, the world’s richest man, has made it a private company from a public company by buying micro-blogging platform Twitter for $ 44 billion, or about Rs 3.36 lakh crore. With a hundred percent stake, Musk will be the supreme of this private company. This question will also be in your mind what is the meaning of Twitter becoming a private company from a public company? Will its governance and functioning structure change? How will this affect its board, employees, and investors? And above all, how much will this social media platform change for us as a private company?
Difference between Public and Private

First of all, let us understand the difference between public and private companies. A public company is one that is listed on a stock exchange and its shares are publicly traded. Any person can be a shareholder by buying shares of a public company. Twitter had come into existence as a private company only 16 years ago but became a public company in the year 2013 when its IPO came and it was listed on the New York Stock Exchange. Private companies are not listed on the stock exchanges and their stake is with one or a few people.
The reins of the public company are in the hands of the Board of Directors, as Twitter’s board was in the news recently for this deal itself. Since a public company is listed, it has to share all its business information with the stock exchange and market regulator. Even quarterly financial results and big buy-sells. A general meeting has to be called at least once a year. There is no such compulsion on a private company. Obviously, there would have been more transparency in a public company, and information about its financial condition to profit and loss is known to everyone inside and outside.
Jobs and Salaries in the Hands of Musk

The biggest impact of Twitter becoming a private company on its administrative structure will be that Elon Musk will be it’s supreme in a way with a 100% stake. He will be able to make all the decisions independently. He will neither be supervised by any board nor will he have any accountability towards it. Yes, the company has to comply with Corporate Law and related laws.
Musk will have every right to dissolve the board or lay off employees or change their salary structure. However, according to the existing terms and conditions, if he removes Parag Agarwal, the company’s CEO within a year, he will have to pay $ 42 million. This amount may sound big, but the reports coming from quoting company sources, it is being said that after buying such a big company, this amount is modest for Musk and he can remove Parag soon.
If we talk about employees, then understand the big difference between public and private companies. The public company also often offers equity shares to its employees. That is, officers or employees have opportunities to take a stake in the company. But the employees do not get any stake in the private company. To do so is entirely at the will of the owner. That too can only be given to a few people. Now on Twitter, it is up to Musk whether he retains the equity option in the salary structure or not.
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