Twitter Shares Surge on Buyout Talk
CBJ — Twitter shares have skyrocketed on reports the popular social media site may be sold as the California-based company grapples with its slowest revenue growth since going public in 2013.
The sale negotiations will test Twitter’s value both as a data and multimedia company, as other social media services such as Facebook’s Instagram and Snapchat are expanding their footprints and developing new ways to generate profits.
Among the alleged suitors that may acquire Twitter include Alphabet’s Google and Salesforce.com.
Twitter shares rose the most since its stock market debut in 2013, up 21% to $22.59, giving the company a market capitalization of close to $16 billion.
Twitter has been a near-constant focus of takeover speculation amid persistently disappointing sales and user engagement. In its most recent quarterly earnings statement, Twitter’s revenue missed Wall Street estimates and the revenue forecast for the current quarter of $590 million US to $610 million US was well below the average analyst estimate of $678.18 million.
As rivals such as Instagram and Snapchat gain traction with advertisers and social media users, investors have questioned how long Twitter could persist as a stand-alone company.
Co-founder Jack Dorsey returned to the company as chief executive in 2015, but his plan for reviving Twitter is, at best, seen as incomplete.