Elon Musk is a one-man entertainment bonanza, and the pursuit of Twitter is keeping his legend alive. Despite stiff headwinds from some of the company’s Board of Directors, owners, and employees, Musk charged ahead, all the while sporting his trademark, “I know something you don’t know,” grin. According to recent news, Musk has succeeded in his negotiations. The deal has yet to close, but the components are in place.
Confusion and mystery surround “Big Business” and “Big Finance.” In today’s world, it doesn’t get much bigger than Elon Musk, who has attained the coveted title of “world’s richest person.” The usual whiners decry people like Musk as bullies and oligarchs, able to say and do “anything they want.” This is, of course, ridiculous.
Private companies are generally owned by one or more founders, officers, or investor groups. No shares are publicly available for purchase or sale. Public companies have some ownership (shares of stock) listed on exchanges, where shares are bought and sold (“traded”) electronically.
There are benefits to each form of ownership, and ownership forms are changeable. Public companies may go private when an individual or group buys up sufficient shares from public shareholders. Private companies may go public through an IPO, or Initial Public Offering. In fact, Musk recently announced his intention to take Twitter public about 4 years after taking it private.
Many false perceptions exist in the public and the media. One that is heard everywhere in the media, claims that “XYZ is a private company, so they can do whatever they want.” No, they can’t!
It is true that private company owners have far more control and flexibility than do their public counterparts. However, every company is subject to rules and regulations, including Federal and State Wage and Hour laws, environmental laws, and the grandaddy of all, “fiduciary responsibility.”
What is a fiduciary? Simply stated (thanks to Investopedia.com), “a fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interests ahead of their own.” Fiduciaries can be involved in finance, money management, financial advising, banking, insurance, or accounting, plus serving as executors, board members, and corporate officers.
Now that Twitter will be a private, closely held corporation, Musk will have a far greater amount of control, along with vastly reduced reporting requirements. However, he most certainly cannot do “whatever he wants.”
Love him, hate him, respect him, or disdain him, Elon Muck is an American original (he was born a citizen of both South Africa and Canada, and was naturalized as an American citizen in 2002). And we haven’t even discussed his major accomplishments in technology, space, electric vehicles, and other ventures he has promoted.
Further, we already mentioned that, while doing good work, he has made himself the world’s richest man. Isn’t capitalism grand?
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