Twitter Inc (TWTR) Market Cap Drops to Around $10 Billion – Is a Buyout Now Likely?

Share

It’s really remarkable how quickly shares of Twitter Inc (NYSE:TWTR) have dropped over the last three months. In fact, since late October the stock is down over 50% as a combination of a general market selloff and lack in confidence of the company’s executives weight on shares.

As Twitter’s (NYSE:TWTR) market cap hovers around $10 billion, it’s nearly impossible to avoid thinking that the company could be an exceptional acquisition target for any number of tech giants. Namely, Facebook, Alphabet, or Apple could be the best suitors. At the current market cap it’s entirely possible that a bid of between $15 and $20 billion could buy the company outright, and all of these companies have the cash to do so. Imagine the implications for Facebook should they purchase Twitter Inc (NYSE:TWTR). They would own the social media space for decades to come. On the other hand, an Alphabet acquisition would also make plenty of sense for Google to integrate tweets further into their search results and use data from tweets to boost search realiability.

Im not saying an acquisition is all but certain, but I do believe that numerous companies are in fact considering such a deal as they look at the current value of the company. The stock is down 6.00% or $1 following the news, hitting $15.68 per share. Approximately 9.39 million shares traded hands. TWTR shares have declined 51.86% since June 15, 2015 and are currently downtrending. It has underperformed the S&P500 by 42.99%.

From a total of 29 analysts covering Twitter (NYSE:TWTR) stock, 12 rate it a “Buy”, 2 a “Sell”, and 15 a “Hold”. This means that 41% of the ratings are positive. The highest target price is $56 while the lowest target price is $21.0. The mean of all analyst targets is $33.79 which is 115.50% above today’s ($15.68) stock price. Twitter was the topic of 47 analyst reports since July 23, 2015 according to the firm StockzIntelligence Inc. Mizuho initiated shares on January 13 with a “Neutral” rating. Morgan Stanley maintained shares with a”Underweight” rating and a $22 target share price in their report from an October 28. M Partners maintained TWTR stock in a recent report from November 16 with a “Neutral” rating. Barclays Capital maintained the rating on October 28. Barclays Capital has a “Equal-Weight” rating and a $33 price target on shares. Finally, RBC Capital Markets maintained the stock with a “Sector Perform” rating in a report they issued on an October 28.

The institutional sentiment decreased to 1.07 in Q2 2015. It’s down 0.19, from 1.26 in 2015Q2. The ratio turned negative, as 102 funds sold all their Twitter Inc shares they owned while 129 reduced their positions. 56 funds bought stakes while 191 increased their total positions. Institutions now own 269.03 million shares which is 10.40% less than the previous share count of 300.24 million in 2015Q2.

Institutional Venture Management Xii Llc holds 100% of its total portfolio in Twitter Inc, equating to 418,115 shares. Rizvi Traverse Management Llc owns 2.80 million shares representing 100% of their total US portfolio. Moreover, Ah Equity Partners Iii L.L.C. has 69.57% of their total portfolio invested in the company, equating to 1,202 shares. The California-based Kpcb Dgf Associates Llc has a total of 28.35% of their portfolio invested in the stock. Bain Capital Venture Investors Llc, a Massachusetts-based fund reported 817,155 shares owned.

Twitter, Inc. is a global platform for public self-expression and conversation in real time. The company has a market cap of $10.72 billion. The Firm offers services and products for users, advertisers, developers and platform and data partners. It currently has negative earnings. Products and services for users enables a way for people to create, distribute and discover content, which enables a user on Twitter to create a tweet and a user to follow other users.

COMMENTS: