Shares of Twitter Soar Thanks To Takeover Interest





Twitter logo - Light blue 2016 version - Just the birdShares of Twitter, Inc., which had seemingly been permanently written off by investors just a few short months ago, are suddenly surging thanks to a potential bidding war.

It wasn't that long ago when shares of Twitter could be had for less than $14/share. The company was struggling mightily to attract advertisers and there was minimal user growth. While Facebook had figured out how to monetize its mobile users, Twitter continued to swing and miss. Shares of Twitter sagged as many investors moved on.

Over the past few months, however, shares of Twitter have experienced a resurgence thanks to the potential of an acquisition.

Last week, David Faber of CNBC reported that there were numerous companies that were interested in purchasing Twitter. Shares of the company soared and are now trading at around $23/share.

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Facebook is reportedly not interested in acquiring Twitter, though there are a number of companies who have reportedly expressed some interest. They are:

Salesforce.com
Google
Microsoft
Disney

While Twitter has had trouble making money, there is no doubt that they are one of the largest social networks in the world, so it is not a surprise as to why a company like Google or Microsoft may want to acquire them.

Salesforce.com was beat out by Microsoft to acquire LinkedIn earlier in the year, and they are said to be one of the most aggressive bidders for Twitter. Salesforce has been on an acquisition spree as of late, and you can imagine that they would probably not want to be outbid by Microsoft twice in a row.

Google+ has been a disaster, so it makes sense as to why Google would be interested in Twitter. In addition, Google makes heavy use of Tweets in their search index.

It's harder to figure why Disney would be interested in Twitter, though they have apparently hired an investment bank to review a potential bid. Given the uncensored and controversial nature of Twitter, I would have a hard time imagining Disney successfully closing on a deal.

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Some analysts have started turning on Twitter in recent days, arguing that the risk/reward profile on the stock is no longer favorable thanks to the run-up over the past couple of weeks.

Others believe that a potential bidding war could send shares of the company into the high $20s, or perhaps even higher.

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There is a chance that Twitter may elect not to sell themselves at this point, though they would face a large number of very unhappy investors if they pulled themselves off the market.

At this point, it seems as though Twitter will find themselves getting acquired, sooner rather than later.




Filed under: General Market News

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