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Twitter Is Ripe For A Takeover

Low stock price combined with stock structure makes it an easy target

[Photo: Kimberly White/Getty Images for Vanity Fair]

Things haven’t been good for Twitter lately. Ever since CEO Jack Dorsey announced a few weeks ago that the company is thinking about raising its 140-character limit to 10,000 characters per post, the stock has nosedived—continuing a downward trend that has lasted since April of 2015. Just a few days ago, Twitter shares hit $15.48, their lowest ever. The share price has dropped so low that Dorsey is no longer a billionaire.

There has been one anomaly in Twitter’s share price lately, however, reports Re/code. On Wednesday the stock started shooting up. Why the recovery? Because, for a while that day, there were rumors that News Corp. was interested in buying the company. When those rumors were confirmed as false, Twitter’s stock price started to fall again.

As Re/code points out, however, with Twitter’s share price near an all-time low and the positive reception from investors to even rumors of a buyout, Twitter is ripe for a takeover. "There is the idea that Twitter might be better off as part of another corporation, which still sounds like great news right now to many Twitter investors desperately looking for something positive to grasp to," notes Re/code.

Also, the takeover of Twitter by a company with deep pockets (Apple, Google) or an activist investor (here’s looking at you, Icahn) wouldn’t be as hard as other aggressive takeovers because, as Re/code points out, Twitter has no preferred stock. That means any company or person with enough cash could potentially come in and offer to buy up everyone else's shares, getting complete control of the company.

Will it happen? Who knows? However, in the past there have been rumors that many major technology companies have been interested in acquiring Twitter. Those companies include Facebook, Google, Apple, and Alibaba. With a market cap currently sitting under $12 billion, even with a nice premium on shares in the announcement of a takeover, all of those companies would have enough cash on hand to scoop the microblogging site up.

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