Twitter (TWTR) Executive Exodus Puts it in Play - Cantor Fitzgerald
While news of the exodus of several key Twitter (NYSE: TWTR) executives suggests the turnaround is not going well, Cantor Fitzgerald analyst Youssef Squali thinks it may also encourage potential bidders to step forward.
Squali said Twitter has strategic value to potential acquirers. "With over 300M MAUs and a unique global offering of one-to-all broadcasting platform, we see a lot of value in TWTR for both technology and media companies alike," he said.
Potential technology suitors include: Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), Facebook (NASDAQ: FB) and Microsoft (NASDAQ: MSFT), in his view.
Potential media suitors include: 21st Century Fox (NASDAQ: FOXA), Disney (NYSE: DIS), Comcast (NASDAQ: CMCSA) or Time Warner (NYSE: TWX).
The analyst said the fragmented ownership structure/low valuation increase odds of take-out. "There is no concentration of share ownership and no super-voting structure, with the top 3 shareholders owning 6.4%, 5.1%, and 5.0%, respectively," Squali said. "TWTR shares now trades at 2.9x EV/Rev and 9.9x EV/EBITDA and 0.7x P/E/G, a level which could prove accretive to several potential acquirers, in our view."
The firm maintained a Buy rating and $45 price target on Twitter.
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