Twitter Inc (NYSE:TWTR) has been pegged as an acquisition target for over a week now, but none of the alleged suitors like salesforce.com, inc. (NYSE:CRM), Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) or Microsoft Corporation (NASDAQ:MSFT) have actually made a deal. They’ve yet to even confirm that they’re interested. That’s pretty unusual considering most buyout offers are made before the market even knows a buyer was shopping.
While the lack of an offer thus far — despite the clear time limit it could remain available — should be suspicious, TWTR has held onto the bulk of its post-rumor gains. Shares are up 25% since two Thursdays ago, suggesting fans and followers of Twitter stock still believe it’s only a matter of time before a deal gets done.
The list of the most plausible buyers has been narrowed down, however, with one of them being a dark horse player that was presumed out of the running.
CRM Is Back in the Thick of It
Quickly dismissed as a buyer over financial concerns, as well as questions regarding a strategic fit, Salesforce is catching up with Google as an odds-on favorite suitor. Indeed, this possible pairing is at least part of the reason TWTR is up 3% on Monday.
Giving credit where it’s due, the Motley Fool’s Dylan Lewis and David Kretzmann partially put Salesforce back in play as a potential buyer on Sunday. While neither quite understands Salesforce.com’s interest, both conclude the interest is still there.
At the same time, Market Realist commentator Anne Shields deemed a Salesforce deal with Twitter as probable, saying CRM CEO Mark Benioff could still be ok with the newly frothy value of TWTR shares considering how much the company was willing to bid for LinkedIn Corp (NYSE:LNKD) before Microsoft finally submitted the winning bid.
Alphabet Reportedly Getting Serious
Nevertheless, the heart of the modest fire lit under Twitter stock on Monday was stoked by rekindled rumors of a deal with Alphabet that resurfaced late last week.
It’s not “news” in the sense that investors weren’t aware of it before today, but today’s the first chance traders have had access to the news during trading hours. That is, Alphabet — the parent company of Google — is allegedly getting serious about making an offer. Bloomberg and Investor’s Business Daily both reported Alphabet was discussing a potential acquisition of Twitter with M&A advisor Lazard, while MarketWatch and Barron’s regurgitated that news.
In other words, the news has been impossible to overlook. Indeed, the impact of the Lazard rumors has had a full weekend to fester. The end result? TWTR is up 3% today, as expectations of an acquisition rose again.
In the meantime, though the alleged interest of Walt Disney Co (NYSE:DIS) was quickly dismissed like Salesforce.com’s, Disney’s potential purchase of Twitter now isn’t quite as farfetched as it was initially made out to be.
Bottom Line for TWTR Stock
And the winner is? In terms of suitors, as was explained back on Sept. 27, Alphabet has been and continues to be not only the most likely buyer, but the buyer that could do the most with Twitter.
Alphabet isn’t the biggest winner of this bidding war, however. That honor belongs to owners of TWTR who’ve watched the value of their position soar more than 25% in less than two weeks, with no end in sight.
And that may be the most interesting nuance of the story, as the other shoe has yet to drop. Maybe it won’t.
All too often, rumors of mergers and acquisitions end up having more bark than bite, as a great number of them never actually pan out. It doesn’t take long for the news/chatter to fade, with the underlying stocks losing the ground they had gained on buyout expectations.
The Twitter buyout buzz isn’t going away, though. In fact, it’s getting louder and more credible as time goes on.
Alphabet’s alleged discussions with Lazard are a specific detail that wouldn’t likely materialize the way all-too-many notions eventually become presumed (and largely generalized) facts. It’s arguably too specific for there not to be some truth to it.
That may not mean Alphabet ends up getting a deal done, but after a week of buyout rumors continuing unabated, the case that someone will make an offer is strengthening.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
