Merchant Innovation

Google Buyout Chatter Spikes Twitter Stock


A fresh round of chatter about Twitter’s buyout by Google sent the company’s stock up by 3 percent last week as reports valuing the microblogging site at $100 billion flew on the side.

The new rise in stock comes days after Twitter’s CEO Dick Costolo resigned from his position, which pushed the company’s shares by 7 percent as excitement brewed among investors.

Even though Twitter posted $436 million in revenue, which has been up 74 percent year over year, the company’s earnings fell short of its goal of a $440 million–$450 million projected revenue. The company observed a net loss of $162 million in the quarter due to “lower-than-expected contribution from its newer direct response products.”

While Twitter itself was buzzing with the buyout speculations, several experts described Twitter as an ideal fit for Google’s expansion.

"It's not lost on Google that Twitter is the best real-time search engine out there … there has been speculation as far back as 2009 that Google would buy Twitter from valuations of $10 billion to $20 billion pre-IPO," SunTrust's Bob Peck told CNBC's "Fast Money Halftime Report."

If the buyout were to actually happen in today’s market conditions, Peck said, the deal would "take north of $40 billion" to accomplish and would be difficult — but not impossible — to manage.

"It seems that everyone and their uncle is betting that Twitter will be bought by another firm," Steven Place, founder of options analytics firm Investing With Options, told Reuters.

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