Twitter Stock Surges 20% on Takeover Rumors
Twitter Inc (NYSE:TWTR), the Cinderella of social networks, may finally have found her prince. Naturally, this has benefited Twitter stock, which jumped over 20%. Yes, as we have long speculated at Profit Confidential that Twitter is about to be sold, according to sources at CNBC, potential buyers include some usual suspects like Alphabet Inc (NASDAQ:GOOG), aka Google, and the IT group Salesforce.com Inc. (NYSE:CRM). (Source: “Twitter begins discussions to explore a sale: source,” Reuters, September 23, 2016.)
If Google or Salesforce buy Twitter, no problem. Other technology companies are also in the running, says CNBC, citing unnamed sources familiar with the matter. (Source: Ibid.)
Negotiations between Twitter and these companies have advanced, and a deal could be announced by the end of the year. Surely, many analysts will be looking at Twitter stock in a more bullish light now.
Indeed, Twitter has the privilege of studying different options to revive its stalled growth. The strong rumors of a sale notwithstanding, Twitter can also consider job cuts, asset sales, such as the advertising platform “MoPub,” or its short video app “Vine.”
Takeover speculation for TWTR stock has been buzzing for some time. Twitter’s most recent earnings report disappointed analysts and upset Twitter shareholders. The social media website remains popular with celebrities but has shown a persistent inability to build sales and user numbers.
Simply put, Twitter, according to analysts—I for one have always seen value in it—simply cannot survive if it continues as a standalone company. My opinion notwithstanding, the takeover potential is the best possible outcome for Twitter stock, judging from the market’s reaction today.
All that is needed to push TWTR shares to the stratosphere is a formal announcement of a sale. Twitter co-founder Jack Dorsey took over the reins of the company in 2015 to revive its original dynamism. In fact, Twitter has introduced new products to generate revenues, and its recently-launched sports live broadcast function offering National Football League (NFL) games has proven successful.
But if you can’t beat them, join them, goes the refrain. Now investors can enjoy the ride. All tech eyes will be on TWTR stock, as the negotiations could result in the sale of Twitter in December, and before Christmas. And what a Christmas it would be for those who have Twitter in their portfolio; they may need a bigger tree.