The stock of Twitter Inc. (NYSE: TWTR) edged higher by more than 6 percent during the midday trading session on Monday. The micro-blogging company’s shares shot higher after Microsoft Corporation revealed that it is purchasing LinkedIn for approximately $26.2 billion in an all-cash deal.
Before the announcement of the acquisition deal, Twitter shares are trading 0.4 percent lower. The acquisition of LinkedIn by Microsoft has rekindled speculation that the micro-blogging giant may also be a target for acquisition.
For some time now, the micro-blogging platform has been under Mergers and Acquisitions radar. During the previous week, the TWTR stock inched lower after the news reports came out that the company is replacing its head of product. The head of product is Mr. Jeff Seiber and he took over during the month of September last year. Mr. Seiber was to get back to its previous position of heading the Fabric development product suite of Twitter. At present, the micro-blogging corporation does not have a permanent replacement for Jeff Seiber. With this, the management began a hunt to fill the mentioned position. According to reports, the senior engineering director Mr. Ed Ho will fill in for the time being.
This development is actually the fourth time within 3 years that Twitter Inc. is trying to find a new consumer product manager. Market analysts have reacted in a negative way towards this new development. According to SunTrust, if this trend resumes, the corporation will become the number one candidate for Mergers and Acquisitions in the following year. Moreover, the firm also pointed out that the reassignment of Mr. Jeff Seiber just goes to show that the micro-blogging giant is having difficulties when it comes to arriving at new product innovations compared to what was previously anticipated.
The market analyst Mr. Robert Peck has also asserted that the corporation can be sold for nearly $12 billion, in comparison to its enterprise value of about $10 billion. Among the top suitors of Twitter Inc. include Facebook, Google, and Apple. The analyst has maintained a Buy rating on the TWTR stock, while citing the potential takeover deal.
In addition, the latest LinkedIn buyout initiated by Microsoft Corporation also boosted the hope of Twitter of being a possible target for acquisition. Through an acquisition deal, the micro-blogging giant could stand its ground and finally move ahead with positivity. The recent increase in the stock price of the company displays the confidence of investors that Twitter may be purchased earlier than previously predicted.
Since the beginning of the current fiscal year, the TWTR stock has been under massive pressure. Furthermore, the micro-blogging company has shed 33.33 percent of its value. On a year to date basis, the stock had slumped by 39 percent through Friday, while the S&P 500 index had surged by approximately 2.6 percent.
As of 9:36 AM GMT -4 on June 14, the shares of Twitter Inc. are changing hands by $15.31, up by 5.22 percent or 0.76. Currently, the company’s market capitalization stands at 11.09 B.