Wall Street thinks Twitter will need to sell itself,
but that it won’t happen this year.
“We think that if current user trends continue, M&A is
inevitable for Twitter,” SunTrust analyst Robert Peck wrote in a
note to investors Monday. “However, given the CEO’s
<1 yr tenure and a newly constituted
board, we think an acquisition of
Twitter in 2016 is highly unlikely.”
Twitter has struggled with user growth and engagement, sending
the stock on a downward spiral during the past year.
However, Jack Dorsey only regained the CEO spot
last October, and the company just
appointed Facebook’s former CTO, Bret Taylor, to join its
So, who could acquire Twitter? Google, Comcast, and News Corp
have all been floated.
That’s in line with Peck’s thinking.
“Logical potential acquirers include: larger media/data
companies like Google, Facebook, Apple, as well as media and
telco companies,” he writes. “Further, with intensifying
competition we believe the company could feel compelled to
utilize its $2B net cash to accelerate innovation.”
Peck did not provide a specific post-2016 target date for
when he thought Twitter might get acquired, though he noted that
a deal might require an activist investor to initiate the
Peck cut his rating on Twitter from “Buy” to “Neutral,”
noting that many of Twitter’s new efforts to boost its
business have not materialized, and the stock was down 2% when
markets closed on Monday.
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