Twitter Inc. is inching closer to being sold. According to several media reports Friday — all of which cited unnamed sources — many technology companies, including Google and Salesforce, have expressed interest in acquiring the struggling social media giant.
According to the two sources cited by Recode, selling Twitter is likely to fetch at least $30 billion.
“I think [a Twitter acquisition] would be a way for a media or technology company to have immediate access to a sizable platform,” Anthony diClemente, an analyst at the financial services company Nomura, told the Wall Street Journal. “That’s a big means of distribution of media and undefined social content and in some ways the strategic value of Twitter is in the eyes of the beholder.”
However, the company is yet to receive a formal acquisition bid, and it is still far from certain that a sale will materialize. Twitter, Google and Salesforce are yet to comment on the reports, although Salesforce’s chief digital evangelist Vala Afshar did tweet his personal views about Twitter.
I have tweeted my personal views regarding 'Why Twitter?' numerous times over the past couple of years. I simply love Twitter.
— Vala Afshar (@ValaAfshar) September 23, 2016
The reports come at a time when Twitter co-founder Jack Dorsey, who returned to the company as chief executive in 2015, is attempting to regain ground the company has lost to competitors like Facebook and Snapchat. However, Twitter, which has a market capitalization of $16 billion, has continued to struggle to grow its user-base, despite its recent move to ramp up video content. It currently has 313 million monthly active users, way below Facebook’s 1.7 billion. Compared to Snapchat, a rival younger by 5 years, which has a daily user base of 150 million, about 140 million people use Twitter daily.
As a result, even 10 years after its inception, the company is still not profitable. Twitter’s second-quarter revenue in 2016 rose just 20 percent to $602 million — its smallest gain ever. And, over the past decade, it has accumulated a loss of $2.3 billion.
"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,” Scott Kessler, an equity analyst at S&P Global Market Intelligence, told USA Today. "Twitter reached an all-time high of some $75 the day after Christmas 2013, soon after the (initial public offering), and even with today's increase is down 15% over the past year.
Following Friday’s reports, shares of the company surged over 21 percent. Year-to-date, however, Twitter’s stock has risen just 1.7 percent, underperforming the broader stock index.