On Monday Twitter’s stock was trading lower by more than 13 percent and has now lost more than 25 percent since the start of 2016. Here’s a look at what happened on Monday.
Twitter Isn’t For Sale
Twitter’s stock surged last week following numerous reports which suggested the company could attract an acquisition offer from much larger internet, technology and media companies with sufficient cash and resources to absorb a deal.
Twitter was expected to receive bids from the likes of Alphabet’s (NASDAQ: GOOG) Google unit, Microsoft (NASDAQ: MSFT), Salesforce (NYSE: CRM) and even Disney (NYSE: DIS).
By mid-last week it appeared that Salesforce was a leading candidate to buy Twitter and the social media’s stock traded above the $25 per share mark on October 5 – the first time doing so since late last year.
However, Twitter’s stock started declining on October 6 as various media reports claimed that Google, Microsoft and Disney aren’t proceeding with a bid. Salesforce was still considered to be a bidder but the likelihood of a deal happening diminished as investors called into question the rationale behind an acquisition and also doubted the company’s ability to finance a deal in the $15 billion to $20 billion range when its own market cap is barely $50 billion.
Bloomberg’s report on Monday may have killed off what any little glimmer of hope remained that Twitter would be acquired by Salesforce.
According to Bloomberg, Salesforce, along with the other reported names, all consulted with financial advisers on a deal but none will proceed with a formal offer and bidding process.
Bloomberg’s report also suggested that Twitter’s Board of Directors had a scheduled meeting on Friday with its own advisers but the meeting was canceled.
Twitter’s Board of Directors also shared mixed sentiments over a sale. The company’s CEO Jack Dorsey wanted to keep Twitter as a stand-alone company while its former CEO and current board member Evan Williams believed the company’s future is brighter if it were to sell itself.
With no concrete offer on the table, Twitter’s options are scarce. Recent initiatives to spur user growth such as live sporting events hasn’t achieved the level of success that investors had hoped so.
In the meantime, Salesforce’s investors are celebrating Bloomberg’s report that the company won’t be buying Twitter. Shares of the CRM provider were trading higher by nearly 7 percent on Monday and trading solidly above the $75 per share mark after trading as low as $66.77 at the height of speculation.