Since Elon Musk bought Twitter, investors have wondered what’ll happen to the stock. The event led to the company’s delisting from the New York Stock Exchange (NYSE). In the world of stock trading, the changes in ownership have a direct impact on shareholders.
While you may be anxious to get your disbursements, it’s imperative to keep in mind that the process takes time. Eventually, funds will hit your bank account. As the process unfolds, you may also want to know about the tax implications of Musk taking over Twitter. Under the circumstances, you’re more likely to face a substantial tax bill in the form of capital gains tax.
The tax bill depends on how long you held Twitter shares. As any regulated broker on Metatrader4 will tell you, shares held for less than 12 months are subject to short-term capital gains tax. So, the tax bracket differs between short and long-term capital gains tax. For the short term, you can expect the IRS to bill the funds as income. The applicable rate can be between 10 and 37 per cent depending on other factors like total income.
In contrast, long-term capital gains taxes have a lower rate ranging from 0 to 20 per cent. For this reason, if you bought the shares fairly recently, you can expect a higher tax bill.
Things to do with your Twitter stock payout
As the takeover became official and Twitter stock ceased trading on the NYSE, the company’s attention switched to shareholders. Most stockholders don’t have to get involved because brokerage agents handle all the work. Agents receive the $54.20 per share owed to shareholders. This price was agreed upon when the Elon Musk deal got the thumbs up by a 98 per cent margin.
It’s prudent to make an informed decision about what to do with your payout. Several practical options can help you consolidate your finances. The right move depends on your overall investment goals and current financial situation.
One thing to do with the funds is to prepare for a recession. You can use the payout to make your portfolio as recession-proof as possible. So, you should consider investing in precious metals and companies involved in consumer staples. Also, think about generating passive income via multiple streams. Keeping some cash on hand is also a smart way to protect yourself from the effects of a recession.
Rebalancing your portfolio is another viable move. Take a close look at the types of assets that provide the best investment value for you. You can talk to an investment advisor to determine whether to invest in commodities, bonds, or other options. Some experts recommend investing in companies competing with Twitter.
This approach can yield results if something goes wrong at Twitter. Meta, Snap, and Tik Tok’s parent company are viable alternatives. However, you should remember that some issues Twitter faces also affect its competitors. These issues involve misinformation, bots, and privacy.
The best part is that investment advisors make it easier to assess your options more accurately. Proper guidance also allows you to create a financial plan. Likewise, you can find investment options capable of generating favourable returns.
Twitter stock overview
As an investor, you cease to have any rights to Twitter due to the takeover. Musk now calls the shots at the social media platform. Because of this, you can no longer convene any gatherings to discuss the company. Likewise, it’s no longer possible to sue Twitter as a shareholder.
On the upside, the agreed price of $54.20 per share is a good return on your investment. Of late, tech stocks like Meta and Snapchat have taken a beating. Yet, Musk offered a handsome premium for the shares. So, it’s better than what many investors and analysts expected.
Most Twitter investors consisted of pension funds and private asset management companies. There were also individuals with large stakes, such as co-founder Jack Dorsey.
Musk rolled into Twitter headquarters just as the company’s management team was ready to deal with sweeping changes. He has many bold ideas that the team must implement or face the axe. Although the new owner needs the backing of the board of directors to remove members of the management team, it shouldn’t be a difficult task.
On the other hand, Musk is also looking at installing a new board. He revealed his plans in a proxy statement submitted to the Securities and Exchange Commission (SEC).