Twitter’s got the stock market all a-flutter.
No doubt, you’ve seen shares of the social media stalwart up 16 percent intraday, and the financial press has been picking apart what might be happening behind the scenes as Twitter explores a sale, reportedly.
Reuters reported on Friday (Sept. 23) that Twitter has “initiated talks” with a number of technology firms, with a eye on a sale of the company, which has been bedeviled by slowing revenue growth
Among the possible suitors, according to the newswire: Google (owned by Alphabet) and Salesforce. No comment, yet, has come from any of those firms, perhaps not surprisingly. The market cap of Twitter, at roughly $16 billion, may not be a tough pill to swallow, but the question remains as to the strategic value of the two firms mentioned thus far as possible buyers.
Reuters quoted Morningstar Analyst Ali Mogharabi as stating that Google might be the more logical suitor given the efforts of that tech giant to gain traction in social media. The company, should a takeout materialize, could be worth as much as $22 a share, while the stock is trading above that level, an indication that investors think a sale could ultimately fetch a higher price — and perhaps spark a bidding war. It’s noteworthy that the ultimate peak for the stock has been $74, while, even with the recent surge to the low $20s, the stock remains a “busted IPO” below the initial $26 offer nearly three years ago.
One tell that a dramatic corporate event may be in the works: Several high-profile Twitter execs have been exiting the firm. Most recently, as noted by TechCrunch, Twitter’s TV head, Andrew Adashek, has announced his departure, as has Marcus Mabry, who was head of the North American Moments curation unit.
Does Twitter have incentive to sell? Profits are hard to come by, and the cumulative loss for the firm has been more than $2 billion since inception, noted Reuters.