Twitter's shares fall 19 per cent after acquisition bubble bursts
07 Oct 2016
Twitter Inc's shares plummeted over 19 per cent in early trading today after technology website Recode reported that Google currently had no plans to make a bid for the company.
Walt Disney Co too was undecided about moving ahead with a bid, while Apple Inc was unlikely to be interested, Recode reported yesterday, citing sources.
That left Salesforce.com, which lost the bid to buy LinkedIn to Microsoft (See: Microsoft to acquire LinkedIn for $26.2 bn in cash) as the only potential buyer, according to Recode, although the cloud-software maker had not publicly confirmed that it wanted to make a bid.
Salesforce chief executive Marc Benioff told CNBC yesterday that Twitter was "an exciting product, but obviously the business has a lot of challenges."
The shares of Salesforce surged 5 per cent to $71.85.
Twitter's shares were down 19.2 per cent to $20.10, valuing the company at about $14.2 billion.
The company, run by Jack Dorsey, had faced challenges generating revenue growth and profit despite average active users numbering 313 million monthly.
Twitter had told potential acquirers it wanted to conclude negotiations about selling itself by the time it reported third-quarter earnings on 27 October, Reuters reported yesterday.
Up to yesterday's close, Twitter's stock had risen by about a third after reports in September that the company was in talks with Salesforce. According to commentators if Recode's sources were to prove correct, it left Salesforce.com as Twitter's last, best hope at wooing a suitor who would pay a premium for the business (a possibility that had not gone down well with Salesforce shareholders).
Benioff had chosen to be non-committal about company's interest in the midst of its annual Dreamforce conference, but he had told Forbes' Alex Konrad earlier this year that he knew exactly what he'd do to ''fix'' the company.
