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Elon Musk’s Twitter Deal Poses the Multi-billion-dollar Question to Companies: Public v. Private?

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Elon Musk and Twitter

Elon Musk’s proposed $44 billion swoop on Twitter has highlighted a growing debate on the merits of companies staying or going private.

For now, the Tesla and SpaceX boss – and world’s richest man ($244 billion) – is said to have gone cool on taking over the social media platform.

Speculation here ranges from Musk recoiling from the pressure his eye-watering proposal is placing on Tesla’s stock, to claims that he aims to secure Twitter for much less than his original headline-grabbing offer.

Neither changes the fact that he vowed to take Twitter private if the deal goes ahead, prompting comment from progressive broker-dealer Rialto Markets, which is masterminding the rise of many successful high-growth companies who have no intention of ‘going public’.

Rialto Markets CEO and Co-founder Shari Noonan said: “Staying private delivers a flexibility that has been supercharged by crowdfunding from smaller investors and accredited investors who readily ‘buy in’ to a firm’s products or ethos, enabling company expansion free from potential constraints by big corporate shareholders or VCs and public scrutiny of their accounts and plans.

Noonan, who has just received the prestigious Instinet Positive Change Visionary Award at the 2022 Markets Choice Awards in New York, highlighted the electric vehicle company, ATLIS, which Rialto Markets helped to crowdfund $30 million during its crucial start-up phase.

It has also enabled crowdfunding for Digital Twin pioneer, Cityzenith, whose futuristic tech helps real estate owners and even whole cities cut their carbon emissions and running costs dramatically.

“In both cases, and typical of the new breed of companies liberated by the 2012 JOBS Act and its crowdfunding opportunities, ATLIS and Cityzenith have built investor communities who know they can offload their holdings for potential profit eventually, through a secondary market platform like our own ATS (automatic trading system).

“Public ownership puts other strong hands on the company in the form of major corporate investors, who must then be kept on board with the management’s business strategy.

“This isn’t always popular with visionary and entrepreneurial CEOs who want flexibility, particularly in the fast-moving tech sector.

“When Elon Musk announced his abortive plan to take Tesla private in 2018, he said this would enable it to be ‘free from as much distraction and short-term thinking as possible’.

“In Twitter’s case, he will see that the social platform went public in 2013 – for what then seemed a colossal $1.8 billion – but returned profits in 2018 and 2019 only.

“Though this makes his multi-billion dollar offer even more staggering, Musk must surely see greater profit potential for Twitter.

“The key stat is Twitter’s user base: less than 220 million, tiny against Facebook’s at around three billion or even TikTok’s one billion, but it must be argued that Twitter punches well above its weight in terms of influence so there is surely scope to boost numbers and, therefore, advertising revenues.

“All of which supports his intent to go private if his takeover succeeds: it means he doesn’t have a potentially powerful gang of shareholders who might slow his plans to change Twitter by say, insisting on an immediate drive for profitability when he prefers to play a longer game for greater rewards.”

Noonan added that it was not unusual for major public companies to go private, often to recover momentum away from alleged short-termism imposed by shareholders.

The computer giant, Dell went private from 2013-2018 to enable it to “be even more flexible and entrepreneurial” according to Founder Michael Dell, while the Hilton global hotel chain re-structured and expanded as a private company from 2007-2013.

Noonan added that private status also freed a company from the need to report its financial documents and other developments to the US Securities & Exchange Commission, which then become public information and available to scrutiny by competitors and other interested parties – perhaps would-be buyers, welcome or hostile.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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IL Bagno Rewards High Performing staff with All-Expense Paid Trip to Dubai

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Victor Nwaogu receiving Ticket from ED Black Pelican

IL Bagno, the leading total interior solutions company in Nigeria, for the world’s leading manufacturers of sanitary fittings, kitchen, tiles, doors, and other interior solutions recently recognised two members of its staff for their high performance and commitment to the success of the organisation.

Bosede Opebiyi and Victor Nwaogu both administration officers at IL Bagno’s Abuja and Lagos office respectively were awarded the IL Bagno excellence award based on a voting process by managers of the organization. They were both presented with a 5 day all-expense paid trip to Dubai and a commendation letter signed by the CEO.

Speaking on the award presentation, Mrs. Adetola Owolabi; Executive Director Black Pelican Group said ‘’as an organisation, we value and reward professionalism and exceptional performance. We voted the winners considered to be the most supportive and representatives of the ethos of hard work, diligence, and professionalism. They both represent the ideals of the company and go over and beyond to support other members of the team to achieve the organisations objectives. Consistent good work never goes unnoticed; I would therefore encourage others to emulate the diligence shown by them’’.

An elated Opebiyi thanked the organization for the kind gesture. ‘’I am proud to be a part of the Black Pelican Group, thank you for recognising my effort, I am motivated to do even more’’.

‘’I am truly humbled by the trust and faith placed in me, I feel compelled to work harder and improve my skills on the job’’ Nwaogu stated.

The debut award will be given twice in a year to deserving staff members voted by managers of The Black Pelican Group.

IL Bagno business is the business unit with the Black pelican Group that provides total interior solutions, it has carved a niche for being the preferred supplier of bathroom and other interior fittings to the most discerning clients and projects. The company recently celebrated its 18th anniversary.

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Merger and Acquisition

Bankman-Fried’s FTX Says no Talks to Acquire Robinhood

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Robinhood-Investors King

Sam Bankman-Fried’s FTX crypto exchange said it is not in talks to acquire Robinhood Markets Inc, after a report on Monday claimed the exchange was exploring such a deal.

Bloomberg News reported on Monday FTX was discussing internally how to buy the app-based brokerage and that Robinhood had not received a formal takeover approach, citing people with knowledge of the matter.

“There are no active M&A conversations with Robinhood,” Bankman-Fried said in an emailed statement.”We are excited about Robinhood’s business prospects and potential ways we could partner with them.”

Robinhood declined to comment. The retail-trading platform’s shares were down 5% in extended trading after jumping over 14% on the report.

Last month, the founder and chief executive of FTX revealed a 7.6% stake in Robinhood but said he did not have any intention of taking control of the retail-trading platform.

Robinhood’s dual-class shares give its founders control of 64% of the voting shares outstanding, making it virtually impossible for takeovers without their support.

The popular trading platform has come under pressure this year as trading volumes ease from 2021’s frenetic pace – when retail investors used it to pump money into shares of so-called meme stocks such as GameStop and AMC Entertainment.

That slowdown, along with a sell-off in high-growth technology stocks, has driven a near 50% slump in Robinhood shares this year. The company had a market valuation of nearly $7 billion as of Friday’s closing price.

FTX’s U.S. arm announced in May it would launch a stock trading platform by the end of the summer. Last week, it acquired partner Embedded Financial Technologies for an undisclosed amount, which would add custody, execution and clearing services to its equity trading platform.

FTX and its billionaire founder Bankman-Fried have rescued other players during the crypto market’s recent crash. It provided crypto lender BlockFi with a $250 million revolving credit facility to help the firm avoid a liquidity crunch.

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Oando Finally Released 2020 Unaudited Financial Statement, Reports N133.426 Billion Loss

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oando

Oando Plc, a Nigerian leading multinational energy company, has finally released its 2019 and 2020 unaudited interim financial statements after two years of dispute with shareholders and suspension of the company’s 2018 Annual General Meeting.

The revenue of the embattled oil company declined from N576.572 billion reported for the 2019 financial year to N489.986 billion in the 12 months ended 31 December 2020. This represents a decline of 15%. Oando disclosed in its unaudited financial statements obtained by Investors King.

Gross profit plunged by 43.8% to N40.782 billion, down from N72.560 billion achieved in the corresponding period of 2019.

The company’s net finance cost also grew from N40.712 billion in 2019 to N58.941 billion in 2020. Loss before income tax improved by 64.65% from -N377.415 billion in 2019 to -N133.426 billion in 2020.

Oando received N170.337 billion in tax credit in 2019 and another N855.420 million in 2020. Loss for the period moderated by 35.98% to N132.570 billion in 2019 to N207.078 billion.

Explaining the reason for the delay, Oando said “The suspension of the company’s 2018 AGM and attendant issues prevented shareholders from being kept abreast of business operations, a move decried on numerous occasions by Oando and her executives as not being in the best interests of the market.

“In July 2021, Oando entered into a settlement with the SEC on all matters subject to litigation and other issues flowing therefrom, thus putting an end to one part of the dispute with Ansbury.

“Key for Oando was that the SEC did not find the company guilty of any wrongdoing and by way of a settlement, was able to prevent further market disruption and harm to Oando Plc’s shareholders,” the statement said.

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