Yesterday's UK Budget announcement certainly gave us a lot to consider, with the abolishment of the Lifetime Allowance being the headliner.
We discuss Twitter Shares
Welcome to The Expat Investor Podcast, I’m Tom Pewtress – Head Of Global Partners here at Skybound, today I will be joined by Stuart Mizen one of Senior Financial Planners and we will be looking at Twitter shares.
So earlier this year Elon Musk decided he was going to buy twitter and after a lot of back and forth, a bit of legal action and big dispute over the number of real accounts on Twitter… the deal is finally done! $44 billion is the price tag @ $54.20 per share.
In order to finance his purchase his for Twitter he has had to ask the likes of Morgan Stanley and Bank of America to borrow around $13 billion, he has also had to equity raise around $7 billion from Oracles co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal.
It’s pretty clear Musk has some big intentions for Twitter and in a world where stock market prices have been selling off left right and centre due to the turmoil created this year, it’s a big price for the worlds richest man.
So what is he going to do with Twitter? Well its apparent that Musk is all in favour of free speech and verified accounts. He has some grand plans revamp the infamous blue ticked verified account status by making it a paid for service at $8 per month a lot of controversy around that and many people feel that it go either way in terms of it being successful or not. And right from the get the get go, it is clear he is not happy with the workforce – some big firings from day 1 and last week around 3,700 employees were notified on email of their termination.
So some big changes at Twitter coming and no doubt given that it’s Elon Musk we are in for a rollercoaster of a ride to find out where the company ends up over the next few years.
So what happens next to the twitter stock, well, twitter has officially merged with Musks subsidiary X Holdings II Inc. which is wholly owned by Musk’s X Holdings I Inc. which subsequently is wholly owned by Elon Musk himself. So Musk now owns the whole of twitter and for any of you out there that are/were holding Twitter shares at the time of the sale, whether that be through a brokerage account, a platform or any type of investment account – if you don’t know already Twitter was delisted from the New York Stock exchange on 8th November 2022. And now you are probably wondering what happens and how do you get your money back from your investment, well simply, Twitter has a list of all of it’s shareholders and it is their job to wire the corresponding money to the brokers holding shares on behalf of you the shareholder – this is to be done over the next few weeks. At some point you will see your Twitter stock disappear from your account valuation and a cash amount be credited to your account.
So it begs the question what to do next with that cash? Do you go and buy Meta, Google or any of the other big Tech firms which have recently had their stock price torn to pieces this year, do you spend it, do you owe taxes on it or are you going to speak to your financial planner about it?
Well today I am not going to give you an answer for what you should do, but I am going to speak to Stuart Mizen about the some of the things to be aware of when purchasing U.S Assets like Twitter, meta, google or any other stock domiciled in the US.
So Stuart welcome to the Podcast, first time joining us and good to have you.
Thanks Tom, good to be here.
Most people are quite happy wanting to own a piece the pie in these big companies based in the US because they have been very profitable and their share prices have done very well over the years Stuart, but you specialise in providing advice for owning US domiciled assets when working with Expat Investors, so why is that?
Well, simply most people who are not US connected in some way do not know the risks they are opening themselves up to when directly purchasing US assets. So for example, if I am of British/Swiss/Indian decent living in Europe or the GCC – owning US assets could potentially have unknown risks for me.
Ok, so when you say risks, we all know that investing carries risk and stocks, shares, etfs etc can go up and down in value, but are you saying there are other risks?
I am yes, it doesn’t necessarily apply to everyone but when purchasing direct assets in any country like the US you must consider things like Tax, estate duties and probate laws.
Ok so for someone like me who lives here in the UAE, what possible taxes could I pay if own US Stocks?
It’s not the most straight forward topic in the world Tom and each investor may face different hurdles depending on your nationality, domicile and current tax residence that’s why we are actually holding a seminar on Thursday 17th November here in Dubai plus I encourage anyone who is holding direct assets to reach out for a formal discussion on the matter but just to give a quick overview:
• Holding direct assets means you potentially pay income tax an dividends and distributions in the US given that that income is US derived
• Holding direct assets in excess of $60,000 means you potentially end up with a US estate tax bill of 40% - and if you have no connection to the US other than these stocks you own that can be a needless tax bill
• And finally, if you have paid that US estate tax upon death and now your family are wanting to release those funds from your accounts they could be waiting months if not years due to the legal probate system in the US.
Wow ok, so a lot more to it than just buying good companies that I think will make money in the future. Just shows there is potentially a lot more to think about when investing as not planning properly could incur some rather large penalties or headaches later on down the line.
It’s a real insight into the importance of planning as over the last 10 years technology has allowed us to simply invest into these companies or use Robo advisers based on buying US funds for people to help accumulate and generate wealth.
Thanks Stuart for your time today, that brings us to a close for the Podcast – so if you were holding Twitter stock keep an eye for that cash to hit your account and then be careful of what you do next with it. We strongly recommend seeking financial advice if you are holding or planning to invest in US listed securities. For more information please feel to contact Skybound or Stuart directly through our socials.
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