News is swirling that Twitter are in early negotiations with tech sector giants Google and cloud computing company Salesforce regarding a potential sale of the social media pioneer in a deal that could be worth around $17 billion.
According to un-named sources close to the discussions, Twitter have been exploring a sale of the company for a month or more and are being assisted by Allen & Co and Goldman Sachs to find interested parties.
Prior to the recent talks, Goldman Sachs had sent out feelers to several global media conglomerates, but responses were cold to neutral at best, even though many prominent observers feel the San-Francisco based company would be a good fit for industry titans like Walt Disney, Comcast or Fox.
After news agencies leaked that Twitter were in sales talks the company’s share price leaped 25 percent to $22.83 in the Thursday morning session on the New York stock exchange.
None of the companies involved in the potential deal were officially answering emails or phone enquiries regarding the matter although in a personal tweet the chief digital officer at Salesforce, Vala Afshar said, “Lots of good reasons to look at Twitter. Great place to promote ourselves, context rich news, and real-time learning network.”
Twitter have received criticism from activist investors in recent months for failing to grow its user base in line with 2016 projections, and rumours have been rife on social media regarding speculation over a possible sale to a rival.
“Twitter is a great place for keeping a fast paced diary of your life. However, that’s a pretty niche market which suits celebrities and professionals, but hasn’t attracted a broader user base,” said an analyst at CTI China Renaissance in a TV interview on Friday. “It’s hard to compete with Facebook in terms of pure user volume, not with Twitter’s current platform model anyway.”
The assistance Twitter are receiving from Goldman Sachs regarding the sale could be traced back to when they helped the company go public nearly three years ago. Just after that, Anthony Noto left the investment banking giants and became CFO at Twitter.
Many analysts feel that a deal is critical for Twitter at this stage in their development as the pressure builds from their shareholders. Stock in the firm had previously plummeted since its heady days of two years ago when it hit an all-time high of $70 per share.
