Rumored Forever, Twitter (TWTR) May Have Finally Put the 'For Sale' Sign Up
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If you're not living under a rock, you've heard the news that Twitter's (NYSE: TWTR) board may have finally gotten the memo that it can't go it alone and it's time to sell itself. Shares of the social media provider are up 18.4% today following the news break from CNBC's David Faber this morning. Faber said suitors are believed to include Salesforce (NYSE: CRM) and Google (NASDAQ: GOOGL), although no sale is imminent.
Here is a run-down of the situation:
1. While growth has clearly slowed, Twitter is still one of the most important social networks. Arguably it's #2 behind Facebook; not necessarily in size but in importance.
2. Twitter has been in the rumor mill for years, but this picked up after Microsoft bought LinkedIn in June.
3. Google would love to own Twitter and the two already have a close partnership. That said, Google may be worried about antitrust issues so that's why it hasn't pounced already. Google, however, probably doesn't want to see Twitter go into the hands of someone else, so will likely make a bid if a formal sales process is commenced.
4. Salesforce (NYSE: CRM) missed out on LinkedIn to Microsoft and may see Twitter as the transformational deal it needs. The WSJ reported this afternoon that Salesforce is in fact interested. Shareholders of CRM don't currently get the logic and are selling the stock down over 5%.
5. FT reported this afternoon that Twitter has hired Goldman Sachs as its banker, so this could be more than just idle chatter this time. Hiring a banker means the board is seriously considering its alternatives.
6. Re/Code reported that Twitter wants 'at least' $30 billion in a deal. This would equate to about $43/share, or almost double current levels. This report was met with a collective laugh by traders. However, there is always a starting 'ask' from a seller and a starting 'bid' from a buyer, negotiations from there leads to a deal. While it might want $30 billion, it may settle for a lot less.
While the saga of a Twitter sale seems like it has been around forever, it may have just started in earnest.
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Create E-mail Alert Related CategoriesMergers and Acquisitions, Rumors, Trader Talk
Related EntitiesDavid Faber, Goldman Sachs, Twitter
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