In his letter to Twitter announcing the offer, Musk wrote that the social media giant needed to become private “to go through the changes that need to be made.” 

Twitter has been publicly-traded since November 2013, when it held an initial public offering that raised $1.8 billion.

Companies often get big news headlines when they go public, especially when it involves a flashy and lucrative IPO. But companies bought out by an investor that then become private can sometimes go for much larger sums, and it’s not uncommon.

How a public company goes private

Fast-food chain Burger King went public for the first time in 2006, raising $425 million, before being bought four years later by investment firm 3G Capital for $3.3 billion and then taken private. And in 2007, publicly listed real-estate investment company EQ Office was acquired by investment management company Blackstone for $39 billion and taken private.

Companies that go private are no longer listed or traded on a public stock exchange. Going private also means that they no longer need to report financial information to the Security and Exchange Commission (SEC) or follow many of its rules.

Going private often entails a few important benefits for the company. It removes the pressure to file quarterly financial reports, giving executives more freedom to pursue riskier and longer-term projects without being concerned about public shareholders demanding quick results.

Companies often go private after being bought by private equity firms or other investment groups, making Elon Musk’s takeover bid as an individual somewhat of an outlier. But for Musk, the point seems to be having at least most of the control.

Freedom to make change

In his letter to Twitter, Musk emphasized that he sees “extraordinary potential” in Twitter as a “platform for free speech around the globe.” But he added that the social media platform’s current management is unable to unlock that potential.

It isn’t the first time Musk has railed against Twitter for repressing free speech, which he partly blames on the platform’s reliance on ad revenues. But the changes he has in mind may not make for immediate profits.

Musk has said he will tweak the service’s policing of content, which has included censoring or banning certain users for spouting hate speech or inciting violence, including former President Trump. He also said he prefers temporary “timeouts” to permanently banning users.

Another benefit of taking Twitter private is that it would no longer need to report its quarterly financials to the SEC, an agency the billionaire recently referred to as “bastards.” In 2018, Musk settled the SEC accusations that he had falsely said claimed to have had enough money secured to take electric car company Tesla private. As part of that settlement, he stepped down as Tesla’s chairman and paid a fine.

Update April 25, 2022: This story has been updated from the original with information about Twitter accepting Elon Musk’s acquisition offer.