Shares of mobile app Twitter surged on Friday after sources close to the issue noted that the ailing social media said the ailing social media company is moving closer to being sold.
These sources indicated that the company has, in fact, received expressions of interest from a handful of technology and/or media companies—some of which quite notable—and may soon receive a formal bid for a final sale.
Sure enough, potential suitors include the likes of the powerful Google and Salesforce.com entities, as well as a few other technology companies.
Specifically Twitter shares shot up in excess of 21 percent on Friday, despite the fact that it is not necessarily easy, right now, to determine the eventual value of the potential deal. However, some sources imply that the sale could be for around $26 per share, which is roughly $3.50 higher than the value at the close of the day, on Friday. Still, there are other reports that put the total bid range at a value between $18 billion and $30 billion.
Of course, the board of directors at Twitter are likely in desire of such a deal, as the app has been struggling to regain headway lost in the quickly saturating and highly volatile social media market. Still, even with this motivation, there has been no assurances that any deal, at all, could materialize; though one intimate source said that momentum is increasing and a deal could be reached by the end of the year.
Indeed, Twitter CEO Jack Dorsey is looking for a way to stabilize revenue. The company has, unfortunately, lost $3.2 billion over the last ten years. Even though Twitter’s revenue in the second quarter of this year increased by 20 percent—to $602 million—it is the smallest period of income the company has ever reported.
As such, S&P Global Market Intelligence equity analyst Scott Kessler comments, “We think such an acquisition could make sense. However, we could see some company leaders and shareholders perhaps wanting a price/valuation seen by would-be suitors as unrealistic.”
And these “would-be suitors” are believed to be interested not only in media company’s presence but also, and perhaps more importantly, the data that Twitter actually generates where it sits within the social media landscape.