Twitter Inc (NYSE: TWTR)


Twitter had an incredible trading session in the market today, and while I’d like to say it was for good reason, it definitely wasn’t. The reason for the gains that we saw today had to do with speculation that recent statements mean an acquisition is on the way. Today, we’ll talk about the news, how the stock reacted, and what we can expect to see from TWTR ahead. So, let’s get right to it…

TWTR Once Again Gains From Hopes Of An Acquisition

As mentioned above, Twitter had an incredible day in the market today after a statement was made that led investors to believe that an acquisition might be on the way. This movement is strikingly familiar to what we saw earlier in the month following rumors that Microsoft may be considering acquiring the company.

This time around, there hasn’t been any speculation with regard to what company may be interested in acquiring TWTR. Instead, all of this excitement came out of a statement made by a co-founder of the company Ev Williams. With regard to the possibility of an acquisition, Williams had the following to offer…

We’re in a strong position now, and as a board member we have to consider the right options,”

How The Stock Reacted To The News

While there is no solid news that an acquisition is likely to happen, nor was there even a company offered as the buyer, TWTR had an incredibly strong day in the market. By the end of the trading session, the stock made its way up to $19.21 per share after a gain of $0.83 per share or 4.52% during the session.

Let’s Get Back To Reality Here!

I get that acquisition hopes are exciting. After all, if an acquisition happens, the investors involved in the stock will likely see incredible gains. But come on people! Today, we saw a stock that is struggling on multiple different levels see strong gains because of an empty statement that insinuated that an acquisition could happen. The statement wasn’t that an acquisition is happening, there was nothing fundamentally strong about the statement, and at the end of the day, there was absolutely no reason for the gains that we saw in the value of the stock today.

What We Can Expect To See Moving Forward

Moving forward, I maintain a relatively bearish opinion of what we can expect to see from TWTR. At the end of the day, the company has ignored user growth issues for far too long, allowing itself to become branded as a social network that offers very little. Now the company is reaching for branches, making its way into the already overwhelmingly competitive video streaming market. Sure, that may help with the overall user experience on the site in a small way. However, I believe that anything we see from TWTR at this point is too little too late. Overall, I see no reason to expect to see gains in the stock ahead!

What Do You Think?

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