Twitter shares surge as social media firm moves closer to sale
Reports link Twitter with potential takeover by Salesforce or Google
Twitter shares rose over 19 per cent on Friday amid reports that tech giants including Google are circling the social media site.
Twitter is moving closer to a sale and has received expressions of interest, according to reports on Friday, sending the microblogger’s shares up more than 20 per cent in their biggest gain in over two years.
Twitter, Salesforce and Alphabet could not be reached immediately for comment. Salesforce shares fell more than 3 per cent, while Alphabet dipped about 0.25 per cent.
Twitter has been a near-constant focus of takeover speculation amid persistently disappointing sales and user engagement. In its most recent quarterly report, it posted its slowest revenue growth since going public in 2013 and issued a lacklustre outlook.
As rivals such as Facebook’s Instagram and privately held Snapchat gain traction with advertisers and social media users, investors have questioned how long Twitter could persist as a standalone company.
Co-founder Jack Dorsey returned to the company as chief executive in 2015, but his plan for reviving Twitter is at best seen as unfinished.
The CNBC report sent Twitter shares to their highest since early January,rising to more than $22.50.
Twitter’s stock regularly jumps on rumours that a bid is afoot, but no bids to date have developed into a deal.
In its latest quarter for the three months to June, Twitter reported its eighth-straight period of falling user growth and its slowest revenue growth sine it went public.
“Clearly, the turnaround is still a work in progress and the question of whether being a platform for a mass audience versus a niche audience needs to be answered,” James Cakmak, an analyst at research firm Monness, Crespi, Hardt & Co, said at the time.
Patrick Moorhead, analyst at Moor Insights & Strategy, told Reuters this summer that investors are becoming increasingly frustrated at the lack of progress. “We are a year into Dorsey coming back and there is really no end in sight of when it is going to start picking up to where investors are going to be happy,” he said