Twitter took the helm after news broke that Elon Musk, the billionaire owner of electric car maker Tesla, had successfully persuaded the platform’s board to back his takeover of the company for around $44bn (£33bn). Corporate and social media headlines. accept. .
The NYSE-listed shares are valued at $54.20 (about £41) per share. The board will now recommend the offer to the company’s shareholders.
In trading today (Tuesday), Twitter’s stock fell below $50 as investors digested news of Musk’s acceptance of the offer, which drew mixed reactions, especially within Twitter itself. Over the past 52 weeks, shares have traded as low as $31 and as high as $73.
While shares are still well below Musk’s bid of $54.20, anyone buying Twitter stock at today’s price has a chance to profit if shareholders approve the deal.
If someone buys at today’s price and the trade doesn’t work out and the price falls below it, they will suffer a trade loss if they sell.
Market Reaction
A clear hostility has erupted between Mr. Musk and Twitter employees, as social media is now stepping in to moderate content, sometimes temporarily banning members or flagging content they deem inaccurate or misleading.
The Tesla boss is totally committed to free speech.
Some users of the platform have criticized the idea that one person can have such a powerful forum and, in theory, have free rein over controversial figures in expressing their opinions. Others welcomed possible changes under Musk’s reign, such as: B. Fewer ads and elimination of fake “bot” accounts.
Interactive Investor’s Victoria Scholar said: “If Mr Musk takes control of the company, there could be some major changes, with the focus shifting from content moderation and healthy content sharing to full freedom of speech, which Musk says is a ‘social imperative’.”
“But the biggest change is that the company will be taken private, allowing for more flexibility and less accountability. Additionally, we expect changes that Musk outlined over the weekend, including allowing users to pay with Dogecoin and the premium service Twitter Blue’s Lower prices.”
How do I buy Twitter stock?
If you want to buy Twitter stock, you need to set up a trading account on the investment platform or use a dedicated stock trading app.
These options are detailed in Andrew Michael’s Beginner’s Guide to Investing. He also wrote a more in-depth article on the best investing apps to help you buy and sell stocks.
Another option is to buy pooled mutual funds that already have an interest in Twitter. Here, you can also participate in such funds through the investment platform.
According to Best Invest, funds available to UK investors with significant exposure to Twitter include the Morgan Stanley US Advantage Fund and the Legg Mason ClearBridge US Active Growth Fund, which, according to their latest facts, have returned 4.1% and 3.9%, respectively. Social media platforms have leaves.
Buy US stocks
Twitter’s ticker is TWTR. It is listed on the New York Stock Exchange and trades from 9:30 am to 4:00 pm ET.
You should be able to buy U.S. stocks through most brokerage accounts. There will be a currency conversion fee (usually around 1%) for stock purchases in U.S. dollars unless you are funding the purchase from a U.S. dollar account.
Most brokers also have slightly higher transaction fees for buying U.S. stocks than U.K. stocks, but if you plan to trade U.S. stocks on a regular basis, it’s worth comparing the fees of different brokers.
You will be required to complete a Form W-8BEN (valid for three years), which will allow you to benefit from a reduction in withholding tax on eligible U.S. dividends and interest from 30% to 15%. Holding U.S. stocks also exposes you to currency risk. If GBP/USD strengthens, your shares will be worth less in GBP (and vice versa).
As with UK stocks, all gains on US stocks are subject to capital gains tax, unless you keep the stocks in a personal savings account or in a self-invested personal pension plan.
How to Sell Twitter Stock
At some point, you will want to sell your assets. To do so, log into your investing platform, enter the ticker symbol (TWTR) and select the number of shares you wish to sell.
Be aware that if you make a substantial gain, you may be subject to capital gains tax (CGT) if you sell your holdings, especially if your shares are outside tax-exempt packaging such as a personal savings account or own account held. Invested in a personal pension.
The CGT allowance for tax year 2022-23 is £12,300. Learn more about CGT rates and allowances here.
Things to Consider When Buying Stocks
First, there are no guarantees on the stock price. They can and often do fluctuate from moment to moment, gains can quickly turn into losses, and at worst you can lose your entire investment.
In other words, don’t buy Twitter or any other stock thinking you’re a surefire winner. There are always risks, and you should be fully aware that you may incur irreparable losses.
However, if you understand and accept the risk, you might consider investing in stocks as a potential way to earn more from your capital, rather than investing in cash.
Here are some golden rules:
- Know Your Limits: When Buying Stocks, Only Invest In What You Can Lose
- STAY SAFE: Before you make any investments, build a solid financial foundation for your finances – keep at least three months’ worth of regular expenses as a cash reserve for an emergency fund
- Avoid leverage: This is where you borrow money to invest. This takes the fundamental risk of investing and makes it toxic because there is a risk of losing other people’s funds, not just your own
- Maximize efficiency: See if you can put your stock purchases into a tax-advantaged personal savings account
- Minimize Fees: As you can see from the article above, the fees charged by investing platforms and apps can hurt the value of your holdings, so take a closer look
- Diversify your bets: Sophisticated investors reduce their risk profile by investing in a range of companies or buying funds that are themselves exposed to a range of investments.
- Do your research: Knowing when to sell is just as important as knowing when to buy. So keep an eye on your portfolio to see if any action needs to be taken – your platform or app should be able to help in this regard
- Think long-term: Opportunities like Twitter’s are compelling, but a stock investment should be viewed as a long-term — preferably five years — proposition to allow time for continued market growth.
