Twitter Inc (NYSE: TWTR)
Twitter is having a rough day in the market today, and for good reason. Lately, rumors have been surfacing that Google was interested in acquiring the company. However, news came out today that this may not be the case. Today, we’ll talk about the news, how the stock reacted in the market, and what we can expect to see from TWTR moving forward.
TWTR Takes A Dive On Recode Report
Yesterday, in after-hours trading, Recode released a report that proved to be a bomb dropped for those hoping for a Twitter acquisition by Google. The publication said that three potential bidders from the list of bidders we have may not be interested. To make matters worse, one of those bidders was the one everyone expected to be the buyer… Google.
The publication said that it had anonymous sources. Citing those sources, Recode said that Google was “not moving forward with an effort to buy it at this time.” They also said that TWTR should have incredibly low expectations when it comes to a bid from Apple. Finally, it was once believed that Disney was pursuing a possible acquisition of the social network. However, the Recode post put that rumor to rest.
The Implications Of This News
The news that was released was overwhelmingly negative. After all, TWTR is in a rough spot with regard to getting user growth to head in the right direction. As they continue to struggle, it seems more and more clear that the company isn’t going to get things right and that new ownership may be the only thing that can save the network.
The only problem is that the list of potential buyers is dwindling. While I expected that Google would be a great fit, the new updates show that Google is no longer interested… So, who is? We know from previous reports that CRM may be interested in buying Twitter. However, considering the business model and what the social network has to offer, the acquisition offer there wouldn’t likely offer a strong premium either. So really, for many, the idea that Google isn’t going to make an offer is a damning piece of news.
What We’re Seeing From The Stock
As investors, we know that the news moves the market. Any time positive news is released with regard to a publicly traded company, we can expect to see gains in the value of the stock as a result. Adversely, when negative news is released, we can expect to see declines. Unfortunately for TWTR, the news that was released was anything but positive. As a result, we’re seeing big declines in the value of the stock at the moment. Currently (4:00), the stock is trading at $19.87 per share after a loss of $5.00 per share or 20.10% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bearish opinion of what we can expect to see from Twitter. At this point, the last-ditch effort to really return value to shareholders has failed. Sure, they have the streaming video plans and CRM may be a buyer, but either way, the deal is not going to be anywhere near as big as expected. All in all, I’m expecting to see declines from TWTR.
What Do You Think?
Where do you think TWTR is headed moving forward? Join the discussion in the comments below!