There’s a lot of debate over certain companies and the power they wield.
Many confuse companies with being a branch of government.
They believe that these companies are acting on the orders of the government.
Some public companies do have ties to the government in some capacity.
Private companies do not.
Considering that Twitter is a huge social media platform, you may wonder if it’s a private company or a public one.
Here’s what you need to know about Twitter and what it means to be a private company.
Is Twitter A Private Company?
No, Twitter is not a private company.
Twitter used to be a private company, but it put up an Initial Public Offering.
This means that anyone with enough money can invest in its stocks, and it’s listed on the NASDAQ.
That entitles it to certain rights and protections.
What’s The Difference Between A Private Company And A Public Company?
The primary difference between a private company and a public company is whether it trades in the stock market or not.
Here’s what you need to know about the differences between a public and a private company.
1. Public Companies
A public company is a company that has made a public offering.
This means that they must report their earnings and other financial information to the Securities and Exchange Commission or the SEC.
In return, the public company can participate in the public stock trade.
This benefits the public company in a few ways.
The first is that it allows them to take out bonds from investors in the public field.
While they have to pay back those bonds, which basically act as loans with interest, they don’t have to give up any shares of the company.
This ensures that those in charge still have a controlling interest in the company.
They also have the money they need to expand or do other actions that require funding.
Besides bonds, public companies are also able to sell stock.
This is also called equity.
It’s beneficial when the company wants to avoid paying back bonds and interest.
Selling stocks means they’re basically selling small shares of the company in return for money.
They can use that capital to fund expansions and other investments.
The downside is that they have to give up some of their controlling interest to do so.
They’ll still have plenty of controlling interest left, but if they continue to have to sell their stock, then they might find themselves as one of the shareholders with less power in the company.
2. Private Companies
A private company does not participate in the stock market.
As a result, they don’t need to report their finances to the SEC.
Instead, they rely on private funding to meet their needs.
This often means they’ll hold fundraisers, rely on investors, or utilize their revenue to invest back into the company.
That said, some private companies can trade in the stock market.
There are a few circumstances that allow a private company to sell a small number of shares on the stock market.
Under Regulation D of the SEC, a private company can trade a few shares of stock in its company every year.
This allows it to get a little extra funding to keep investing in the company.
Because there’s a limit to the number of shares a company can sell, it still doesn’t have to report its finances to the SEC.
It may choose to participate in the stock market to attract investors to the company.
Those investors can then choose to privately invest in the company.
That said, a private company can publish information about its finances and other data in an effort to be more transparent.
A company like Twitter, which champions social media and transparency, may publish its earnings and other data to maintain its reputation.
Public Companies And Constitutional Freedoms
There’s a lot of debate over public companies and their impact and influence on constitutional freedoms.
Twitter, as a beacon of social media, often comes under fire for banning users or deleting tweets.
Sometimes it will even attach a warning note to certain tweets to encourage users reading the post to fact check first.
Some believe this is a violation of the right of Freedom of Speech.
Others believe it’s Twitter’s job to make users aware of false claims and sensationalism.
The biggest problem is that users don’t realize that Twitter is a public company.
They believe that it’s private and, as a result, are attempting to work with some branch of government to censor people.
Twitter isn’t a government.
Nor is it a mouthpiece for a particular party.
Because Twitter is a publicly-traded company, it has the right to delete content that it doesn’t agree with or that it believes causes harm.
Some of these decisions may have a basis on an individual’s morality, but it’s mostly because Twitter doesn’t want to be liable.
If someone incites hate speech on the platform, and then someone or a group of people go through a radicalization process and hurt someone else, then the public may hold Twitter responsible.
Since Twitter is self-governing, the buck stops there.
If it allows those sorts of posts to go through and violence occurs, then there’s a chance that the court could hold the company liable.
The victims of the crime may hold Twitter liable since it did nothing to stop the radicalization in the process.
While ending radicalization is a job for the FBI, CIA, and other entities of the Department of Homeland Security, many would argue that social media is the first place that can help stop it.
Whether it’s private or public, the company can be subject to a lawsuit.
Even if it’s acquitted in court, the lawsuit is likely going to be expensive.
It also tarnishes the company’s reputation.
In a world where there are more social media platforms growing every day, Twitter doesn’t want to lose its hold on the vein of social media.
It wants to continue to lead the industry.
If its reputation starts to take too many hits, then more people will leave and seek a different platform.
At the end of the day, Twitter can choose to block or delete certain users and tweets because it’s a public company.
It’s the same as if a user decided to block a person from their feed.
It isn’t necessarily an impeachment of an individual’s right to freedom of speech or freedom of religion because the company reserves the right to remove that content from its website.
Although it’s public, Twitter doesn’t necessarily need to answer to its shareholders either.
The owners of the company still have enough of the controlling interest over the company to run it how they want.
While Twitter wants to ensure that it’s doing the best for its shareholders, it can also make decisions based on its own sense of right and wrong.
Who Owns The Most Twitter Stock?
Speaking of the shareholders, you may be wondering which groups or individuals own the most Twitter stock.
These are the investors who have helped Twitter become the powerhouse of social media that it is today.
Here are the top holders of Twitter stock.
1. Morgan Stanley Investment Management
Morgan Stanley is a multinational investment bank.
It also offers several financial services like investing, wealth management, and other similar services.
The company started in 1935 and saw incredible success in its first year.
Despite having opened during the Great Depression, the company had a 24% market share which was $1.1 billion.
Public offerings and private placements made up that 24% market share.
The company has also gone through several mergers and even sold off some of the aspects of its company.
One major merger was with Dean Witter Discover & Co.
The investment management aspect of the business is responsible for buying shares for its investors.
It currently owns the most Twitter shares at 8.70%.
That brings its total number of shares to 69,576,381.
2. The Vanguard Group, Inc.
The Vanguard Group, Inc. holds the second-most shares in Twitter at 8.35%.
That brings its total number of shares to 66,795,058.
This is an investment management company that is quite unique.
Unlike other investment management companies, The Vanguard Group’s ownership is its funds.
The shareholders then own the funds.
As a result, the shareholders are the owners of The Vanguard Group and not other investors or fund managers.
This allows it to charge extremely low maintenance and other fees.
The expense ratio for The Vanguard Group in 1975 was 0.89%.
That’s fallen significantly to 0.09% in 2021.
That makes The Vanguard Group one of the least expensive investment firms.
It also ensures that the company doesn’t run into conflicts of interest.
Since it only involves its shareholders, and no outside investors, the company can move forward according to its shareholders’ wishes.
Other companies have to find ways to please both their shareholders and their outside investors.
The Vanguard Company is second in terms of having the most assets under management with $7.50 trillion assets.
It is second only to BlackRock, Inc. which has $9.01 trillion in assets under management.
Vanguard is also the largest issuer of mutual funds in the entire world.
It’s in second place for the largest issuer of ETFs.
Because of its focus on tracking the S&P 500, it has been able to see great returns with minimal risks.
The fact that it owns the second-most shares in Twitter means that the shareholders involved in The Vanguard Company have the second-most control over Twitter.
3. BlackRock Fund Advisors
Another company that has a lot of shares in Twitter is BlackRock Fund Advisors.
This is another multinational investment management corporation.
Originally, it operated as a risk management and fixed income asset manager.
Since then, it’s turned its attention toward asset management.
It’s currently the world’s largest asset manager.
The company tends to invest in the social, environmental, and corporate governance markets in particular.
It’s also the first company to receive approval from the Chinese government to operate its business there.
The company primarily does it’s investing through its clients’ 401(k)s.
BlackRock Fund Advisors owns 4.49% of Twitter.
That makes them the third-most company with the most shares.
That brings their total number of shares to 35,899,287.
4. Jack Dorsey
The CEO of Twitter, Jack Dorsey, also owns a significant amount of stock in Twitter.
His total percentage of shares is 2.30%.
That’s a total of 18.04 million shares in Twitter.
That makes him the eighth person with the most shares in Twitter.
Is Twitter A Private Entity?
The debate over Twitter being private or public grows a bit murkier when asking if Twitter is a private entity or not.
While Twitter is a public company, it’s also considered a private entity.
This means that the platform, itself, is private.
However, when a user engages with the platform and posts something on their Twitter, then they’re potentially transitioning from a private forum to a public forum.
Twitter works in such a way that users can post small quotes or thoughts with a limited number of characters.
They then post the message, called a tweet, on their profile.
Using various hashtags, users can then enter that tweet into a larger pool of tweets with the same hashtags.
Users who search for that specific hashtag can then look through Twitter and read all the tweets that use that hashtag.
It may prompt them to follow a certain user because they enjoyed their tweet.
By following that person, they’re able to see future tweets that the user makes.
One of the issues that some people took with Donald Trump’s use of the platform was whether he was unlawful when he blocked certain users from viewing his tweets.
This occurred when some users were responding to his tweets with accurate facts to dispute his claims.
He chose to block them to keep them from voicing their opinions on his posts.
The courts found that Trump was unlawful in doing this.
This was because they believed that by posting on Twitter, Trump was opening a public forum.
A public forum is where anyone can enter the debate and have their Freedom of Speech protected.
Since he blocked these individuals who had already voiced their opinions in the public forum, he was denying them their Freedom of Speech.
This issue then becomes even more complex when examining Twitter’s role in blocking certain users’ tweets, and adding warnings about fact checking.
Since the court ruled that Twitter, itself, is a private entity, it indicates that the company has the right to block those they wish.
That’s based on the fact that the company isn’t a public forum.
Its platform is one.
Twitter also gives users the ability to turn off comments and retweets on their tweets.
Those that use this feature are not entering a public forum because they’re not opening their tweet up for discussion.
They’re simply posting a thought or opinion.
By keeping the matter private, they’re not unlawfully prohibiting anyone’s Freedom of Speech since it isn’t public to begin with.
Twitter is a private entity whereas its platform can open up as a public forum.
The History Of Twitter
A few people are responsible for the creation and rise of Twitter.
Those involved in its creation were:
- Jack Dorsey
- Biz Stone
- Evan Williams
- Noah Glass
It launched in 2006.
Only six years later, Twitter had grown to more than 100 million users.
Those users posted 340 million tweets a day.
Many consider Twitter as a microblogging platform.
It allows users a limited number of characters to make posts about what they’re doing, how they feel, and what they believe.
Celebrities use it as a way to interact directly with fans.
Companies use it to promote sales, promotions, and new products.
Everyday users use it as a way to connect with friends or speak out about something they believe in.
Dorsey described the decision to name the company Twitter after reading the definition of the word.
It’s described as being a short burst of inconsequential information.
To Dorsey, that summed up Twitter’s purpose perfectly.
Although originally made to be a social media platform, Dorsey has since seen it as more of an information network.
Its original purpose was to allow employees and non-employees to post statuses about themselves.
Regarding employees, it would help them let others know when they finished a project or were taking a break.
Since then, it’s become a place where people can share information.
That might be as light as sharing a cooking recipe or as heavy as helping families find a kidnapped victim.
Twitter has evolved from its simple beginnings and will likely continue to evolve in the future.
Twitter is a public company in that investors can buy and sell its stocks in the stock market.
However, courts have designated Twitter, itself, as a private entity.
That makes the issue of censorship and Freedom of Speech on the platform even more confusing.
Although Twitter started as a means to update coworkers and friends about one’s status, it has since taken on a life of its own.