Twitter (TWTR) Stock: Exploding on Buyout Hopes

Twitter Inc (NYSE: TWTR)

Twitter has been struggling in the market for quite some time now, there’s no denying that. However, the stock is headed upward today, and in a big way. The reason for the gains is the fact that recent reports say that the company is very close to a formal takeover offer. Today, we’ll talk about the news, whether or not a takeover is likely, what we’re seeing from the stock today, and what we can expect to see from TWTR moving forward.

TWTR May Be Getting Acquired

As mentioned above, Twitter is having an incredibly strong day in the market today after reports surfaced that the company is very close to a takeover offer. After all, there are few things that get investors more excited than an acquisition. Nonetheless, according to recent breaking reports from CNBC, the company is nearing an acquisition.

According to these reports, there are two companies that are vying for the possible purchase of the social network. Those companies include Google’s parent company, Alphabet, and customer relationship manager company, Salesforce.com.

Is An Acquisition Actually Likely?

When it comes to acquisition rumors, I always like to move with caution. After all, I’ve seen several investors dump massive amounts of money into stocks on rumors like these, only to find out later that it was just a rumor and they lost a good chunk of change.

In this particular case, the idea of an acquisition isn’t far fetched at all. The truth is that TWTR recently discussed the potential for selling the company in a board meeting. Accordingly, Jack Dorsey is all over the idea as he may be leaving his post if things don’t turn around soon.

At this point, TWTR is clearly ready to be sold. So, what about the potential buyers? In this case, I believe that Google has far more to gain than Salesforce.com. At the end of the day, Google acquiring the company would be a match made in heaven. With massive amounts of live data, the company would be able to use the data to better their search engine. On top of that, there’s only a couple tech giants that I could think of that could turn things around for the company. Google is definitely one of them. All in all, while I don’t think that an acquisition by Salesforce.com is likely, I do have a strong suspicion that Google will be acquiring Twitter soon.

What We’re Seeing In The Market

While the rumors have not been confirmed yet, investors are clearly excited about the idea of an acquisition. As a result, TWTR is climbing in the market today. Currently (1:21), the stock is trading at $22.20 per share after a gain of $3.57 per share or 19.14% so far today.

What We Can Expect To See Moving Forward

Moving forward, I have a relatively mixed view of what we can expect to see from Twitter. At the end of the day, the company needs the acquisition. If the acquisition happens, we’ll likely see massive gains in the value of the stock. However, if an acquisition doesn’t happen, TWTR is likely to be back at square one, leading to further declines. With a CEO that is on the helm of leaving the company and continuing user growth struggles, it’s clear that the current management team isn’t fitting the bill. Without an acquisition, TWTR could see more dramatic declines.

What Do You Think?

Where do you think TWTR is headed moving forward? Join the discussion in the comments below!

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