The Twitter Inc (NYSE:TWTR) buyout rumors have reached a fever pitch, with a new candidate seemingly popping out of the woodwork every day.
Walt Disney Co (NYSE:DIS) and Salesforce.com, Inc. (NYSE:CRM) are the latest TWTR buyout candidates, according to reports. The social-media giant held preliminary talks with Salesforce.com last week; on Monday, Disney was reported having interest.
Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT) were previously reported to have interest in buying Twitter. Last month on InvestorPlace.com, Wayne Duggan threw out News Corp (NASDAQ:NWSA) and International Business Machines Corp. (NYSE:IBM) (in addition to Salesforce) as potential “dark horse” candidates.
With the TWTR buyout rumors seemingly inching closer to reality by the day, I think it’s high time we add a few more such dark horse candidates to the list.
From my perspective, the following three companies are possible buyers that would make a lot of sense.
Dark Horse TWTR Buyer: Facebook (FB)
A union of the two biggest behemoths in today’s social-media-happy world makes sense on several levels.
Facebook Inc (NASDAQ:FB) succeeds in many areas where Twitter fails — it turns a profit through mobile advertising (71 cents in per-share earnings last quarter, as opposed to a 15-cent-per-share loss for TWTR); it’s growing its user base like crazy thanks to rapid global expansion and acquisitions such as Instagram and WhatsApp, while Twitter’s user base has been stagnant for more than a year; it has messaging in real time, only with a more robust platform that allows things like video messaging.
But TWTR is better at breaking news than Facebook — indeed, many of the potential buyers were reported on Twitter.
For many people — particularly smartphone-toting, social-media-savvy millennials — Twitter is their No. 1 news source. Right now, that’s a big blind spot for Facebook, and a void Mark Zuckerberg would love to fill … especially if it means keeping Twitter away from its chief rival, Google.
Dark Horse TWTR Buyer: Comcast (NASDAQ:CMCSA)
Things look bleak for Comcast Corporation (NASDAQ:CMCSA) in the long term.
It’s losing cable TV customers by the tens of thousands as Americans “cut the cord” in favor of cheaper streaming-video alternatives such as Netflix, Inc. (NASDAQ:NFLX) and Amazon.com, Inc. (NASDAQ:AMZN) Video. Its film production studio (Universal Studios) has been struggling. And there’s nothing terribly exciting on the horizon.
A Twitter buyout could change all that. TWTR is desperate for streaming video content. Comcast is desperate for new users … and Twitter has 300 million of them every month.
Though the viewership numbers haven’t been great (yet), this fall’s debut of Thursday Night Football games on Twitter was a window into how TWTR as a source of streaming video content might work down the road. I’m sure CMCSA executives took notice.
Dark Horse TWTR Buyer: Apple (AAPL)
Hm, let’s look at Apple Inc. (NASDAQ:AAPL):
- Giant technology company with plenty of cash to win a bidding war? Check.
- A universally recognized yet increasingly stale brand that could use a new product/acquisition to reinvigorate consumer and investor excitement amid a sea of yawn-inducing iPhone upgrades? Check.
- A company with a large enough ego to acquire something just to keep it from falling into the hands of its competitors (namely Google)? Check.
- Plenty of platforms on which users could watch Twitter live streams (iPhones, iPads, Macs, Apple Watches, etc.)? Check!
Apple has somehow flown under the radar in most Twitter buyout discussions. But at a time when both companies are reaching for the “refresh” button, don’t be surprised if Apple swoops in out of nowhere to gobble up TWTR and bask in the myriad headlines that would follow.
As of this writing, Chris Fraley did not hold a position in any of the aforementioned securities.