Report: Twitter Will Discuss Potential Sale at Tuesday’s Board Meeting

According to a Recode report, embattled social media giant Twitter Inc (NYSE:TWTR) will discuss a potential sale during its board of directors meeting this week.

This piece of news is the latest in a long string of potential sale rumors. The biggest question is, who would actually pony up the billions of dollars to absorb the company? From Recode:

There are the big corporate names that might take another close look at Twitter, such as Google (there’s an unusual scenario one source mentioned in which it becomes part of some Alphabet media spinoff), Apple and even media mogul Rupert Murdoch, either via 21st Century Fox or News Corp. Other possible bidders include private equity firms that may want to take the company private, where it can solve some of its issues out of the public eye.

While Twitter’s leaders have long maintained that they want it to remain independent, the idea of a sale became more plausible after recent comments from co-founder and board member Evan Williams, who had also been the company’s CEO before being replaced by Dick Costolo in 2010. (Costolo was later replaced by co-founder Jack Dorsey, who had previously been replaced by Williams).

If you remember, Rupert Murdoch pulled the trigger on the ill-fated MySpace acquisition back in 2005 for $580 million. That one didn’t work out as planned, but that doesn’t mean NewsCorp won’t consider taking another shot in the space.

This acquisition would undoubtedly cost far more than MySpace, of course:

[F]inding a buyer won’t be easy, given the Twitter’s estimated cost. Using the same multiple LinkedIn got from Microsoft in its recent $26 billion acquisition deal, a Twitter buyer would have to fork over about $18 billion. That’s a steep price tag for a company that has had persistent issues with growth and also one that is still losing money each quarter.

If Twitter can’t find a buyer soon, then more job cuts could well be on the way (and an acquirer would likely look to cut costs as well, anyway). The company already shed about 8% of its workforce last October.

When the company’s board meets tomorrow in San Francisco, the acquisition issue will no doubt be front and center. The future of the company may just depend on finding a buyer with deep pockets that can restore growth and finally push TWTR into profitability.

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Twitter shares rose $0.35 (+1.78%) to $20.28 in morning trading today. TWTR has fallen 12.19% year-to-date, versus a 7% gain in the S&P 500 during the same period.

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On the ETF side of this issue, the Social Media Index ETF (NASDAQ:SOCL), which Twitter makes up nearly 10% of, rose to $24.68 per share, up $0.08 (+0.33%). Despite Twitter’s weak performance, SOCL has still surged 24% since the start of 2016.