Do Twitter’s (TWTR) Executive Departures Increase Buyout Chances?


You’ve likely heard already that several of Twitter Inc’s (NYSE:TWTR) executives have left the company over the last week and a half, including Alex Roetter, Katie Stanton, Kevin Weil and Skip Schipper. This all comes after the company’s stock has plunged more than 45% over the last three months and CEO Jack Dorsey restructures and redefines Twitter’s business model.

These departures, however, could make the company an even stronger takeover target as there is now no major concentration of stock ownership or voting rights. While the departures certainly are not great news for the current business, they may entice any number of media and tech companies, including, Alphabet, Microsoft, Apple, Facebook, Disney, Comcast, Time Warner and others to take another look at a possible buyout scenario. The company has trremendous value from a total member standpoint, and with the right tools could eventually become a cash cow. It may take outside sources to realize this potential however.

The stock closed at $17.02 during the last trading session. It is down 52.54% since June 19, 2015 and is downtrending. It has underperformed the S&P500 by 43.67%.

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 98.53% above today’s ($17.02) 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 worsened, 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 $11.62 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.