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Elon Musk to Acquire Twitter, Stock Rises

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Big news for Elon Musk. The entrepreneur and billionaire is set to acquire Twitter at the end of the year. Once the transaction is complete, Musk plans to take the company private.

The deal is worth an estimated $44 billion, and is set to close at the end of 2022. The acquisition has been unanimously approved by Twitter’s board.

In a recent press release, Musk says Twitter has tremendous potential. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans,” he says.

According to the press release, Twitter stockholders will receive $54.20 in cash for each share of Twitter stock they own once the deal is closed. That’s a 38% premium from the stock price on April 1, 2022, which is when Musk revealed he was the company’s largest single shareholder.

This comes right in the middle of earnings season, which is when major U.S. companies report their profits or losses from Q1. Twitter says it plans to release its Q1 fiscal year 2022 earnings on April 28, 2022, but will not have a conference call because of the pending transaction.

Twitter stock closed up 5% higher on the heels of the news.

The stock market’s performance changes every day in response to a variety of events, both nationally and globally. Investors, and therefore stock prices, respond quickly to news, and there’s a lot going on. The market looks forward and reacts fast. As an investor, you should look forward, too —  but instead of reacting, the best response is to stay the course and keep investing

How Investors Should Deal With the Stock Market Rising and Falling

For new investors, big swings up or down in the market can be a lot to handle. If you’re a long-term investor, remember that slow and steady wins the race. Keep your “buy-and-hold” investing mentality and invest with low-cost, broad-market index funds. The best performing portfolios are ones that are diversified and have the most time in the market. 

If you are investing in index funds that track the S&P 500, you have Twitter in your portfolio. The great thing about index funds is that they are diversified, meaning your money is spread out among hundreds, if not thousands of companies. So if one company tanks your money isn’t totally gone. Same when a stock goes up.

Pro Tip

Put your money in an index fund that tracks the S&P 500. You’ll get a piece of hundreds of companies, but without the volatility. Remember to stay the course because investing is long term.

“The most important thing is to always remember what you’re investing for,” says Thomas Muñoz, associate financial life advisor at Telemus, a financial advisory firm. “Short-term volatility is obviously something people should be aware of. But if you have a long-term time horizon, historically the stock market goes up. And when that’s the case, it’s important to have the discipline to keep dollar-cost averaging your [investments].” 

Dollar cost averaging spreads out your deposits over time, and has demonstrated that it performs better “during a period of high market crashes,” says according to Rebecka Zavaleta, creator of the investing community First Milli

Whatever you do, invest early and often, especially if you have a long investment timeline. Dips and crashes will happen, and so will other scary-sounding things like economic bubbles, bear markets, corrections, death crosses, and recessions. 

You can even take advantage of a dip to invest more, but not if it impacts your regular investing schedule, Muñoz advises. It’s hard to tell when there’s going to be a dip or correction, and “not even the best investors in history can time the market.” The best advice is to stick to your plan and keep investing.

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