How to Buy Twitter Stock (TWTR)

 How to Buy Twitter Stock (TWTR)

How to Buy Twitter Stock (TWTR)

Elon Musk, the volatile CEO of Tesla, Inc (TSLA), struck a $44 billion deal to buy Twitter and take it private for $54.20 per share in cash in late April. Musk and Twitter's board have openly sparred over the deal's conditions in the months afterwards. The agreement appears less likely to come to fruition with each passing week.

Aside from betting on Musk's purchase transaction or maybe merger arbitrage, there aren't many compelling reasons for long-term investors to acquire Twitter stock right now. But, if you're determined to purchase TWTR despite the uncertainties, here's what you need to know.

How to Buy Twitter Stock in 5 Easy Steps

1. Open an account with a broker.

You may be able to purchase and sell Twitter shares using your current 401(k) or individual retirement plan (IRA). If you don't have one, or if you wish to invest for reasons other than retirement, you'll need to create an account with a broker.

Brokers function as go-betweens between you and the stock market, enabling your buy and sell orders.

Brokers differ greatly in terms of account minimums, fees, and account kinds, so do your homework and select the best broker for your needs. Check out our recommendations for the top online brokers if you're searching for a straightforward and quick method to invest.

Once you've found a broker who meets your requirements, you'll be given many account alternatives, including retirement accounts and taxable investment accounts.

In return for locking up your money until retirement, IRAs provide important tax benefits. Taxable brokerage accounts do not provide the same advantages, but they do provide far greater flexibility. You can get your money without having to worry about fines for early withdrawal, for example.

2. Examine Twitter's financial statements

Twitter, being a public business, is required to file financial statements and annual reports with the Securities and Exchange Commission in the United States (SEC).

Twitter's filings provide potential investors with a plethora of information. They give insights on the company's present performance, the threats to its business strategy, and future development plans.

Twitter, for example, stated in its most recent quarterly financial report that its long-term intentions do not include optimizing profit margins but rather investing in the business to accelerate user growth. This is the type of approach that is intended to provide value over time rather than increase share price in the short term.

3. Determine How Much Money to Put Into Twitter

Consider the following variables when deciding how much money to invest in Twitter:

  • Current Price: As of writing, shares of Twitter are around $4 well below the merger deal price. Although some brokers allow you to buy fractional shares of stocks slices of individual shares not all have that option. If your broker doesn’t allow you to buy fractional shares, you’ll have to invest enough money to buy whole shares.
  • Overall Portfolio: Whether or not Twitter shares are a good investment for you is determined by how they fit into your overall portfolio. You should not invest in just one or two firms; instead, distribute your investment funds among a number of areas, including as technology, consumer staples, and utilities.
  • Objectives: While Twitter has an established track record, it is unlikely to produce the huge gains that emerging growth stocks provide. Because its performance is more consistent, it is better suited to long-term investing goals rather than short-term investing or day trading.

4. Place a Twitter Stock Order

To begin purchasing Twitter shares, establish a brokerage account and input Twitter's ticker symbol—TWTR—along with the amount of shares you wish to acquire. If your broker provides fractional shares, you may also specify the monetary amount you want to invest.

When purchasing stocks, you may generally choose the order type. Market and limit orders are the most often used choices.

A market order instructs the broker to purchase or sell the stock as soon as possible at the best available price. A limit order, on the other hand, is only executed when the stock hits the price you specify. Limit orders might be useful if you anticipate a stock's price dropping shortly.

5. Keep an eye on the performance of your investment.

Even if you expect to keep your Twitter shares for years, it's a good idea to check in and assess the success of your investment on a regular basis.

A good metric is to compare its performance to that of important indices, such as the S&P 500, which offer an indication of how the stock market as a whole is performing.

What to Think About Before Selling Twitter Stock

If you need to sell your shares, just type TWTR and the quantity you wish to sell into your trading platform.

However, because selling shares at a profit may result in capital gains taxes, you should consult a tax professional to discuss when it makes sense to sell and techniques for reducing your tax burden.

How to Invest in Twitter Using Index Funds and ETFs (ETFs)

While investing in stocks might be enticing to certain individuals, investing in a single firm can be dangerous. If you want to lower your risk, you may gain quick portfolio diversity by investing in index funds and ETFs.

Twitter is held by several index funds and ETFs. Some prominent alternatives are:

  • Communication Services Select Sector SPDR Fund (XLC). This ETF seeks to provide its investors with exposure to the worldwide communications and technology business, which includes significant firms such as Twitter.
  • Invesco Dynamic Media ETF (PBS). As of this writing, the Investco Dynamic Media ETF's biggest holding is Twitter, accounting for 7.3 percent of the fund's entire portfolio. 
  • Vanguard Total Stock Market Index Fund (VTSAX). If you want a wider index fund, look into the Vanguard Total Stock Market Index Fund, which seeks to replicate the performance of the whole U.S. stock market. Indeed, VTSAX is one of the greatest total stock market index funds. VTSAX now owns roughly 3% of Twitter.

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