Twitter has had many takeover offers before. With over 300 million active users and a posted revenue of $1.4 billion in 2014, Twitter is one of only two social networks in Alexa’s top 10 traffic rankings — Facebook unsurprisingly tops it. Twitter has always steadfastly resisted acquisition, however. But with the return of Twitter founder Jack Dorsey as interim CEO of Twitter (as previously reported by the Inquisitr), rumors of a takeover are rapidly gaining traction.
As Business Insider reports, disappointing growth and a drive to increase shareholder value are forcing Twitter to reexamine potential acquisition. In a conference call with analysts on Thursday, Dorsey expressed that he wants Twitter to remain independent but admitted that it is the board’s duty to entertain any proposal that would increase shareholder value. Deutsche Bank analyst Greg Poole agreed, in a note to investors.
“The CEO dislocation coupled with no super-voting share structure, a board somewhat on the defensive, lots of potential asset value and the current environment of cheap money — leads us to think M+A from a strategic just became slightly more possible.”
Dorsey’s resumption of the role of Twitter CEO comes in response to the announcement that current CEO Dick Costolo will be stepping down from his position on July 1, and as ValueWalk notes, is a marked departure from Costolo’s tone just a few weeks before the announcement. When asked at the Re/code conference, Costolo indicated that he was unconcerned with the security of his position at Twitter, saying that he and Twitter’s board of directors were “completely in sync.”
Of course, not all analysts are convinced that a Twitter takeover is likely. Analysts at Bank of America Merrill Lynch feel that most companies would be uninterested in acquiring the $60-per-share Twitter. They do feel that there is a possibility that Google — which has expressed an interest in acquiring Twitter before — may be interested, but that this would likely result in regulatory challenges. Google is already the top-ranked website in the world, the third most valuable company worldwide behind Apple and Microsoft, and already owns and operates several social networking and blogging products; acquiring Twitter would almost certainly mean antitrust concerns from regulatory bodies worldwide.
Meanwhile, Jefferies analyst Brian Pitz thinks that the time is ripe for Twitter to sell.
“Prospective buyers have been interested in purchasing Twitter in the past, and during the interim search period we believe the opportunity for acquisition is heightened (and would likely require a valuation of $30B+) […] Costolo ‘began talks with the board at the end of last year’ about stepping down, and the lack of a CEO successor signals to us the potential for acquisition.”
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