Twitter is facing turmoil as its market cap and shares dipped to an all-time low since it went public in November 2013. Since its initial public offering, the company has lost more than half of its market cap. Twitter’s market cap this week is approximately $10 billion, a significant drop from the $40 billion it commanded in the months following its IPO. Additionally, the company’s stock is trading below its $26 IPO price. Twitter’s stock closed February 8 at a low $14.87 per share.
Twitter’s turmoil makes it potentially vulnerable to acquisition. Last month, rumors of News Corp.’s interest in acquiring twitter gave the company’s shares a boost. However, a News Corp. spokesperson subsequently denied the rumors. Other possible acquisition contenders are Google and Facebook, both of which have reportedly tried to acquire Twitter in the past.
Google’s failure with popularizing its own social platform, Google+, along with its interests in real-time behavioral data, has made it speculators’ favorite potential acquirer of Twitter. However, the Internet giant has already gained access to Twitter’s real-time data “firehose,” giving Google less of an incentive to buy the social media company. Facebook’s past interest in Twitter has made it another speculators’ favorite. Facebook has previously demonstrated a willingness to invest large sums of money in services lacking in revenue and profits – one example being the company’s $19 billion investment in WhatsApp. However, Facebook is currently designing its own Twitter-style features, a cheaper strategy than buying Twitter itself.
Although Twitter’s market cap may be at its lowest point, it seems that it may not be low enough to encourage potential companies to acquire it. Unfortunately, there is also a problem with being too cheap – the cheaper Twitter gets, the less attractive it appears to acquisition candidates. Presently, Twitter is losing about $125 million dollars every quarter and is struggling to grow its user base. These factors make it unlikely for Twitter to be an acquisition target any time soon.