TWTR News Headlines
Twitter Shares Surge on Reports That it is Exploring a Possible Sale
11:41 AM ET, 09/23/2016 - MT Newswires
11:41 AM EDT, 09/23/2016 (MT Newswires) -- Shares in social media major Twitter (TWTR) surged higher on Friday after the company reportedly commenced talks with several technology companies to explore the possibility of selling itself.
Twitter's shares were 20% higher at the time of writing on Friday after multiple news agencies claimed that it was exploring the possibility of being acquired by another company. CNBC reported that the company was in talks with technology companies including Alphabet's Google (GOOGL) and Salesforce.com (CRM).
MT Newswires sought comments from the three companies. A press spokesperson at Salesforce told MT Newswires that the company does not comment on rumors or speculation. Twitter and Alphabet had not responded at the time of publication.
The rumours come after Twitter posted second quarter results in July which missed analysts' expectations on revenue but beat on earnings.
The company posted revenue worth $602 million in the quarter ended June 30, below the consensus estimate of analysts polled by Capital IQ for revenue of $607.3 million. Non-GAAP net income stood at $0.13 per diluted share, above the mean estimate from analysts for $0.09 per diluted share. Over the past four quarters, the company has missed analysts' expectations on revenue on two occasions and beaten on two occasions.
Price: 22.38, Change: +3.75, Percent Change: +20.10
Twitter
Briefing.com - 10:53 AM ET
Shares of Twitter (TWTR) are up 20% at an eight month high on a report from CNBC's David Faber that the company is moving closer to a sale.
Twitter management has long said that it intends to remain independent despite incessant rumors that larger technology companies were interested in a strategic acquisition of the company.
David Faber reported that Google (GOOG) and Salesforce (CRM) were both interested in the company and the Board is open to a sale but no deal is imminent. Twitter has reportedly decline to comment.
Twitter has struggled mightily since going public as user growth has been essentially nonexistent.
Facebook's (FB) phenomenal success set up Twitter investors for disappointment. Facebook has become much more ubiquitous and had already figured out how to monetize its mobile user base when Twitter came public in late 2013. This set up unrealistic expectations for the micro blogging site. Facebook represents a person's identity on the internet. Twitter is a great resource for news but is mostly occupied by anonymous 'trolls'.
Twitter co-founder Jack Dorsey returned as CEO one year ago to revive the company but user growth remains stagnant. The company continues to disappoint as digital ad dollars increasingly go to Facebook, Instagram and Snapchat.
What's more, Twitter has paid a hefty price to attract and retain talent in Silicon Valley. Stock based compensation totaled $167 mln in the second quarter, wiping out nearly all of the $175 mln in adjusted EBITDA (which excludes stock based compensation).
Twitter has missed sales estimates two quarters in a row and offered downside sales guidance for the fourth consecutive quarter. Jack Dorsey is now focused on making Twitter the place for live events. A deal to stream NFL games started this season.
Analysts on Wall Street have become increasingly negative on the stock as the fundamentals have deteriorated despite acknowledging the strategic value for an acquirer. The stock is now more than 60% off its lows from May/June, leading some analysts to believe the current ~23x EBITDA multiple -- in-line with what Microsoft (MSFT) is paying for LinkedIn (LNKD) -- already captures the premium an acquirer would be willing to pay.
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