Twitter Inc has about 300 million monthly users but the micro-blogging giant is said to be facing serious financial losses amid waning popularity. The company has therefore offered itself for grabs, and is holding talks with a host of technology companies to explore options of a sale.
Twitter’s move in the financial market is unlikely to stun investors or its millions of users, a report from Beijing Bulletin said.
A number of high-profile companies, including Internet giant Google and customer relationship management company Salesforce, have reportedly expressed interest to acquire Twitter.
Twitter co-founder and board member Ev Williams had recently fueled speculations of a sale, when he said in an interview that the company has “to consider the right options.”
Reports confirm Twitter Shares recorded an increased 21 percent in early trading on Friday.
However, the listed prospective buyers–Google and Salesforce–recorded downward slides in their shares, a trend which suggests the companies’ real investors have no intentions of acquiring Twitter.
Twitter went public in November 2013 at roughly $26 per share, and made a remarkable improvement by its stock rise above $74 within just a month after its initial public offering. Sadly, the tempo has fallen down to a heartbreaking low.
The ten-year-old messaging platform that slowly evolved into a potent source of news, entertainment and social commentary, has been battling for long with uninspiring user growth, soft advertising sales and losses running into hundreds of millions of dollars every year.
In the three months ended June, the company’s revenue grew by $100 million to $602 million, but it posted a $107-million loss.
Though a target sale amount is yet to be fixed, there are speculations that the price will be astronomical.
Business analysts are arguing that a “high price tag” will be an unavoidable cause for a delayed sale which in return might deal a major blow to both potential buyers and Twitter. This possible fallout brings the regrettable fate suffered by another technology giant YAHOO!
The latter was eventually sold for a meagre fraction of its peak valuation, after months of strategic talks with buyers.
Analysts estimate that Jack Dorsey’s company could be asking for a price near $30 billion, at least.
Right now, Twitter’s talent is looking at 25 percent more stock wealth since Thursday, which they’ll begin to realize if there is a takeover. The new owner would then have to give them cause to stay, which in the tech world usually involves some kind of world-changing mission that also makes them even richer.
Another prospect, of course, is that no one buys Twitter, in which case its market value is likely to revert to something like Thursday’s price. At that point, stating the Twitter mission falls to its existing leadership – NY Times.
It’s worthy of note that Yahoo was once had a market capitalization value of nearly $125 billion, but a delayed sale talks reduced its worth to an insignificant $4.8 billion – the price at which Verizon agreed to buy.
YAHOO! initially turned down a Microsoft offer of $42 billion back in 2008.