Twitter Users: Let's Convert Twitter to Cooperative Ownership

Twitter seems to be for sale.

Let's us, Twitter users, turn it into a cooperative. 

WHAT? You don’t have $16 billion in your savings account? Neither do any of the other potential purchasers. Keep reading.

Here’s how it works:

PURCHASE

Less than 1% of Twitter users (3 million) buy 100 shares each at the current price (assume this morning's price of $23 per share. Cost of 100 shares = $2,300). (Among this 1% will be users who already own shares, like the coop idea and are willing to pledge those shares for cooperative ownership).

If 1% of all Twitter users purchase (or pledge) 100 shares or more, that would represent about 40% of all shares. These insiders then vote to convert to cooperative ownership.

The $16 billion price tag would be financed by

1) a one-time membership fee of $25 paid by 60% of current users (the other 40% of current users fall away). This generates $4.5 billion.

2) a loan for the rest: $11.5 billion. I've assumed a 10 year fully amortizing loan at 4% in quarterly payments.

The users who buy in now are basically lending the money to make this happen. They would get paid the agreed purchase price when the deal closes and, hopefully, that would be the same price that they pay for the shares now.

ANNUAL OPERATIONS

The members of the new Twitter cooperative would each pay the $25 one-time membership fee, PLUS an annual assessment of about $9.80 per member. 

The annual fee would cover the $400+ million annual deficit that Twitter has been running ($450 million in 2015 and about $410 million for the past 4 quarters) PLUS the amortization of the loan. With the loan repaid after the first 10 years, the annual assessment would go down to less than $2.50 per year (assuming no inflation and no reduction of the deficit).

Critical assumptions:

- Share price: one analyst predicts the share price will fall to $17 (vs today's $23+)

- Number of users who will agree to be members of the cooperative. I changed the assumption to 50% of current users. This increases the loan amount and reduces the users to divvy up the annual obligation increasing the annual assessment to $12.40 per member.

I’m looking forward to your comments. My numbers are based on a spreadsheet that I'm happy to send to subscribers of my blog.

LET'S DO THIS!

Henry Dubb Comes to New York

Labor Day, 1916

Henry Gets An Inspiration From the Statue of Liberty

Ryan Walker, nationally known for his character, Henry Dubb, who had campaigned for Eugene Debbs in the elections of 1908 and 1912, took employment at The New York Call, the official organ of the Socialist Party and Henry Dubb made his first New York City appearance at Battery Park on Labor Day, 1916. 

A few months later, electric lights were installed in the crown of the Statue of Libery for its thirtieth anniversary, and all the luminaries of New York society attended a gala celebration. The Call commented the following day:

Liberty. We had a lot if it in New York yesterday. That is, we had a lot of talk about it. Also, a lot of eating and drinking in celebration of it. That is, a celebration of putting an electric light on top of a huge figure representing said Liberty. The celebration was organized and conducted by a little group who possess the liberty of picking the pockets of the rest of us.

They appreciate this liberty very much. Never tire of orating about it. Whenever any of us show that we do not appreciate having our pockets picked as much as they appreciate picking ‘em, they tell us we’re not “patriotic.”

The Call is the only daily paper in this city today that tells the people the truth about the buncombe ladled out yesterday in big chunks by orators, to the clinking of champagne glasses, while, on the outside, the people were wondering where they would get enough money to buy the necessaries of life at sky high prices.

The plute press is published to keep the minds of the people so muddled that they won’t think anything about how they’re being robbed. The Call is published for just the opposite reason. To show them how they are begin robbed and how they could stop the robbery. That’s the reason the robbers would like to stop The Call. (December 3, 1916)