Why Facebook (FB) Should Buy Twitter Inc (TWTR) Immediately

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You all likely know by now that Twitter Inc (NYSE:TWTR) may be the target of several larger firms who are considering a takeover of the social media giant. One of these companies may in fact be competitor, Facebook (NASDAQ:FB). Trading at a market cap of around $12 billion, Twitter Inc (NYSE:TWTR) seems fairly cheap. Facebook, with a market cap of over $265 billion could gobble the company up in a heartbeat without worry. In doing so, Facebook would then solidify their position as pretty much the only major player within the social media space, at least in North America and Europe.

Unlike Twitter Inc (NYSE:TWTR), Facebook has figured out how to monetize their traffic and do it extraordinarily well. They could use this formula to easily turn a profit with Twitter, even if they were to operate it as its own entitiy. On the other hand, they could also integrate Twitter.com and Facebook.com within eachother, allowing tweets and Facebook posts to be shared on multiple platforms at once.

Imagine the power that Facebook would then have within the social media space. Not only would they now operte Facebook.com, Instagram.com and Twitter.com, but they would also now control one of the faster growing social platforms in the market, Periscope. With the right strategy, Facebook could quickly turn a $12 billion company into a $50+ billion company within two years. The only question is, do they want to stretch themselves this thin, especially with the upcoming growth of their VR platform, Oculus? The stock increased 0.08% or $0.01 on January 22, hitting $17.84. About 15.62M shares traded hands. TWTR has declined 48.53% since June 18, 2015 and is downtrending. It has underperformed the S&P500 by 39.66%.

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 89.41% above today’s ($17.84) 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 is 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 $12.18 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.

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