Twitter, Inc. Stock Sinks As Buyout Speculation Cools Off a Bit

Twitter's list of potential buyers may not be as impressive as rumors suggested.

Daniel Sparks
Daniel Sparks
Oct 6, 2016 at 12:45PM
Technology and Telecom

What happened

Twitter (NYSE:TWTR) stock fell as much as 19.5% on Thursday morning -- and is down about 18.7% at the time of this writing -- after Recode reported Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google and Walt Disney (NYSE:DIS) do not plan on buying Twitter.

Twitter headquarters. Image source: Aaron Durand (@everydaydude) for Twitter, Inc.

Previously, there was speculation Google and Disney, along with salesforce.com (NYSE:CRM), may have been interested in acquiring Twitter. But Recode says "sources close to the situation" assert Google "does not currently plan to make a bid for Twitter" and Disney "is not going to make an offer."

Notably, however, Recode confirmed that Twitter is, indeed, still interested in selling. Furthermore, Recode said Salesforce is also still considering buying Twitter.

So what

With both Google and Walt Disney reportedly out of the running, potential buyers for Twitter may not have to bid as competitively. While this may be better for salesforce.com if it follows through with a bid, it may mean Twitter won't have as much negotiating power if it does solicit bids. In addition, if Google and Walt Disney are truly out of the running, as Recode reports, this highlights two successful market leaders that are uninterested in Twitter, sparking concern over the company's ability to attract other potential suitors.

Now what

Investors should keep in mind that all of this is speculation. It's not certain Twitter will be bought out. And even if the social platform is bought out, it's impossible to guess what price the buyer will pay.

From here, all investors can do is wait for any official announcements from Twitter. Until there's a press release, investors should use caution when reading headlines about a potential buyout.