Twitter (TWTR) Stock up Sharply After Alphabet Evaluates Bid

Shares of Twitter Inc. (TWTR) were trading up +1.25 or +5.42 percent to $24.30 in Friday’s aftermarket after Bloomberg reported that Alphabet Inc. (GOOG)(GOOGL) had hired investment banker Lazard Ltd to evaluate a potential acquisition of the company on Friday afternoon. Twitter stock closed at $23.05 per share, up +0.04 or +0.17 percent in Friday’s regular trading session.


Stock Analysis

Founded in 2006 by Jack Dorsey, Evan Williams, Noah Glass and Biz Stone, San Francisco, California based Twitter is a social media and microblogging service best known for allowing subscribers to “tweet”, or transmit messages limited to 140 characters, but able to send digital files such as photographs and videos.
The company has grown exponentially since its founding and, as of March of this year, Twitter had over 310 million monthly active users.

Twitter had its initial public offering in September of 2013 opening at $26 per share and ending its first day up +18.90 at $44.90 per share.
Twitter (TWTR) Stock up Sharply After Alphabet Evaluates Bid
Image by edisona / Pixabay
The company has been the subject of takeover speculation this year, which has driven the stock up more than 20 percent, with potential buyers being Alphabet (GOOG), Microsoft (MSFT), the Walt Disney Company (DIS), Salesforce.com (CRM) and Verizon (V).

Founded in 1998 by Sergey Brin and Larry Page, Mountain View, California based Alphabet Inc. is an international Internet corporation best known for its Google search engine. The company has been aggressively expanding into other information technology fields through acquisitions. In January of 2014, Google acquired Nest, a company that makes home appliances that connect to the Internet. Google had previously bought DeepMind and military robotics company Boston Dynamics. Other recent acquisitions include Skybox Imaging, Dropcam, Postini, and last month’s acquisition of Apigee Corp. (APIC) for $625 million.

While engaging the services of Lazard Ltd., Google, a subsidiary of Alphabet, has not yet indicated that it would definitely make an offer for Twitter, but puts Alphabet at the forefront of suitors along with the Walt Disney Company and Salesforce.com, which had previously expressed interest in buying the company. Neither Alphabet or Lazard Ltd commented on the matter.

Twitter for its part, has retained the services of Goldman Sachs (GS) and Allen & Co. to entertain bids from potential suitors after receiving interest from Salesforce.com according to sources familiar with the matter. Last week, Salesforce.com’s chief digital specialist, Vala Afshar, tweeted that an acquisition of Twitter by Salesforce.com made sense.

Ashfar’s tweet, “Why@twitter” listed four reasons why the social media company was an attractive takeover target, the tweet was as follows, “1) personal learning network, 2) the best real-time, context rich news, 3) democratize intelligence, and 4) great place to promote others.”

Google is seen as a natural fit for the struggling social media company. The two companies have already made advertising and mobile publishing deals, with Twitter recently agreeing to integrate content inside Google search engine results after a previous collaboration fell through.

Twitter stock has gained since Ashfar’s Salesforce.com tweet, which took place on September 23rd. Twitter stock is still trading below its original initial offering price of $26 per share, but will most likely test the level in this week’s trading.

Other News About TWTR

Can Salesforce.com Afford a Twitter Inc Acquisition?

Company is exploring other companies to acquire after losing LinkedIn to Microsoft.

Why Are Companies Flocking towards Twitter?

Four companies are considering a Twitter bid.

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Published on Oct 3, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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