The social network’s plunging market value is making it an ideal target for M&A.
Twitter’s stock dropped to 5.6 percent on Monday, its lowest crash since its IPO in 2013. At $29.27 per share, the social network is currently valued at $19 billion. This plunge led to the speculation that Twitter is considering yet again to sell its business.
Sources tell Re/code that Google and Facebook held discussions with Twitter two years ago, before the company went public. “At some point, it is just simple math that Google grabs it; why they haven’t yet is a mystery,” said one source close to the situation.
Interestingly, other sources are saying that Google CEO Larry Page is hesitant about acquiring Twitter because he thinks that the social network isn’t solving a real-world problem that Google is taking on. Google’s acquisitions of companies like Nest and Calico come to mind. Simply put, Page thinks that Twitter doesn’t fit the bill.
In spite of this, analysts believe that Twitter’s shrinking market value has caught the eye of potential buyers like Google. In an interview with Bloomberg, Ted Hollifield of Alston & Bird LLP said, “Sometimes a dip in trading price of a stock can be a triggering event for deeper M&A discussions.”
Additionally, Jeff Sica of Sica Wealth Management thinks that there will be an acquisition. “Their comments could be suppressing the stock price for a reason, because their strategy is to be acquired. I’m advising anyone that owns Twitter to hold, because I do think at this point there’s going to be an acquisition.”
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