Twitter’s Stock Soars on Another Takeover Rumor
Twitter’s Stock Soars on Another Takeover Rumor

Shares of Twitter soared nearly 20 percent on Sept. 23, on takeover rumors. Salesforce.com and Google could be interested in buying the social network, according to a CNBC report.

Twitter Inc. (TWTR:NYSE) had lost more than 50 percent of value since its initial public offering in Dec. 2013, giving it a market value of about $13 billion as of Sept. 22, making it an attractive acquisition target.

On Friday, Twitter gained nearly $3 billion in market value after the rumors of a potential takeover by Salesforce and Google emerged. Salesforce.com’s stock was down 5.5 percent and Google’s share price stayed flat.

Twitter’s share price has been under pressure since April of last year. The company is lagging far behind rival Facebook in key metrics such as user growth.

Twitter's share price since its IPO in December 2013. (Source: Yahoo finance)
Twitter’s share price performance since its IPO in Nov. 2013. (Source: Yahoo finance)

In July, the 10-year-old messaging platform announced it reached 313 million monthly active users. In comparison, Facebook has 1.7 billion users.

The company announced disappointing results in the second quarter on July 26. It missed estimates on revenue, growing only 20 percent year-on-year in the second quarter compared to 36 percent growth in the first quarter.

Advertising revenue, the company’s most important revenue segment deteriorated significantly. The management’s third-quarter guidance suggested recent challenges would likely remain.

Salesforce.com’s chief digital evangelist, Vala Afshar, tweeted “Why @twitter?” on his twitter feed on Friday morning, triggering takeover rumors.

Later, he posted another tweet stating that they were his personal views about Twitter.

Goldman Sachs stated in a report that Twitter has multiple avenues for new revenue as well as the potential to be acquired by another company, a couple of reasons why investors can buy the stock.

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