The Wall Street Journal, in its “Heard on the Street” column, published a piece at 4 p.m., the minute the stock market closed, laying out a long list of reasons Twitter Inc (TWTR) might currently be a prime takeover target.
Journalist Miriam Gottfried notes that the beleaguered share price alone is the primary reason: TWTR stock has lost two-thirds of its value since hitting its 52-week high in April 2015, and shares are down 43% in the last three months alone.
The stock closed at $17.39 today, well below the company’s IPO price of $26/share in late 2013. Gottfried says that the possibility TWTR stock is currently a legitimate takeover target “seemed to take hold among investors Wednesday” — shares ended with 4% gains today despite the overall bearish direction of most stocks on Wall Street.
Incidentally, News Corp (NWSA), the owner of the Wall Street Journal, denied chatter that it was interested in acquiring the social media company. The WSJ piece notes that given Twitter’s market value of more than $12 billion (based on diluted outstanding shares), a suitor would have to be a very, very large companies, likely in the tech or media spaces.
Specifically, Alphabet Inc (GOOG, GOOGL) could be interested in TWTR, as it battles Facebook Inc (FB) for digital advertising dollars. Twitter’s 300 million users would give Alphabet a large swath of data that it doesn’t currently have access to, which would allow it to target ads more accurately to users. Time Warner Inc (TWX), Twenty-First Century Fox Inc (FOX), and Tencent (TCEHY) were also floated as potential buyers.
As of this writing, Robert Martin had no position in any of the stocks mentioned.