Yesterday, 7:39 PM
- Alphabet (GOOG +0.3%, GOOGL +0.2%) -- considered by many observers to be the best strategic prospect for buying Twitter (NYSE:TWTR) -- has hired Lazard to evaluate such a deal, Bloomberg reports.
- Twitter is up 5.4% after hours.
- Adviser hiring never means anything definite, but it does suggest the search giant is taking seriously the news and speculation that Twitter could be sold to any number of other companies, including Salesforce.com, Walt Disney or even AT&T.
- Twitter had hired Goldman Sachs and Allen & Co. to go over potential bids after getting interest from Salesforce. Meanwhile, Lazard served as adviser for Google as it agreed to acquire Apigee for $625M this month.
Wed, Sep. 28, 6:28 PM
- Now officially linked in to wide-ranging speculation about who might buy Twitter (TWTR -3.2%): AT&T (T -1.5%).
- A purchase by AT&T could make sense, Mizuho's Neil Doshi writes, but he thinks Twitter's valuation is such that an acquisition doesn't really add up for anybody. He's downgraded TWTR to Underperform, with a price target of $15 (Twitter shares closed today at $22.96).
- If not great fits, the best fits for a Twitter purchase are Salesforce (NYSE:CRM), Alphabet (GOOG, GOOGL) and AT&T, "but that is about it" and "only Alphabet makes sense from a strategic perspective."
- Fundamentals at Twitter have "deteriorated significantly" over the past year, Doshi says. Verizon's paying about six times EV/EBITDA for the core of Yahoo (growing almost as fast as Twitter in many respects), while Twitter trades near a multiple of 16. Microsoft is buying LinkedIn for 20 times, though LinkedIn is growing much faster than Twitter.
- Meanwhile, Nomura reiterated a Neutral rating on Twitter and price target of $13, while Loop Capital downgraded to Sell from Hold, with a price target of $18.
Wed, Sep. 28, 4:47 PM
- With competition heating up with Apple for the future of digital music, Spotify (Private:MUSIC) is in advanced talks to purchase SoundCloud, reports the FT.
- SoundCloud's investors include Twitter (NYSE:TWTR).
- Spotify has 100M users globally, and this month hit 40M paying subscribers. Apple Music has 17M subscribers, and SoundCloud recently launched its own paid service.
- Interested parties include Pandora (NYSE:P).
Wed, Sep. 28, 8:44 AM
- "Any way we slice the data, we just can’t get enthusiastic about this potential transaction," says Citigroup's Jason Bazinet, outlining four reasons why Disney (NYSE:DIS) shouldn't buy Twitter (NYSE:TWTR).
- 1) Previous Internet and media marriages have tended not to work out well (see AOL/Time Warner, MySpace/News Corp).
- 2) Twitter's challenges, ranging from lame user growth to management turnover.
- 3) Whether a cash or stock deal, Citi sees declines for Disney in both scenarios.
- 4) The team at Citi can't see many ways for Disney to actually help Twitter, and note their belief that both Twitter and Yahoo lost money on the deal to stream NFL games online - so why would even more content on the social media platform be of financial benefit?
- Hoping stories of Disney's interest are wrong, Bazinet retains his Buy rating on DIS.
- TWTR -1% premarket
Tue, Sep. 27, 10:28 AM
- With the latest speculation involving The Walt Disney Co., Salesforce, Alphabet and Microsoft, the analyst offers a take on possible acquisition premiums and prices.
- Peck: "Typically when a potential deal is actively discussed in mainstream media prior to announcement (pushing the price higher), the premium paid is stated vs. a prior period closing price moving average. For Twitter, we looked at the 30, 60 and 90 day averages and used 40% as a takeout premium. That level of premium would drive prices of $27, $26, and $24 - close to the original $26 IPO price and only up 3% to 15% from today’s price. Further, $26 share price would represent ~$20B transaction value, 22x EV/EBITDA (ignoring excess SBC) and 6.1x EV/Sales on 2017 street estimates – a slight premium to LinkedIn’s takeout multiples. However, should the company clarify that it is not for sale, the shares could trade back down to the ~$18 level, from before the press announcements, or down ~22%.
- He maintains Twitter (TWTR +0.4%) at a Neutral rating and $18 target (current price $23.39).
Mon, Sep. 26, 3:32 PM
- With Salesforce (reportedly working with Bank of America) (CRM -0.2%), Alphabet (GOOG, GOOGL) and The Walt Disney Co. (DIS -1.3%) rumored to be in the mix, Twitter (NYSE:TWTR) is said to be gearing up to present itself to potential acquirers.
- While a bid by Salesforce is seen as unlikely and unfavorable by some (Citi, Morgan Stanley), last Friday it appeared firmly in the mx. Alphabet, meanwhile, is considered a favorite by others, with the available cash, advertising expertise and social network tie-in possibilities to make Twitter work under a new parent organization. Now that Disney is the latest to reportedly join the group, sports, distribution and video prospects are being weighed.
- Trading up more mildly than Friday's run on this development, it appears analysts, investors and Twitter itself are unsure of what direction the company will take next. The negative reaction of Salesforce shares on Friday and Disney shares today, though, may signal difficulty in attaining favorable terms for all parties involved in a deal should one come closer to materialization.
- Update (3:41 PM ET): CNBC's David Faber adds Microsoft (MSFT -0.8%) in as a potential bidder.
Mon, Sep. 26, 2:28 PM
- With stocks moving on a report that Disney (NYSE:DIS) is talking to advisers about a possible bid for Twitter (NYSE:TWTR), Disney chief Bob Iger last week gave a clue to one aspect of synergy: Twitter's moves into video.
- Speaking at the Goldman Sachs Communacopia Conference last week, Iger pointed out that "new entrants" to sports broadcasting (obliquely including Twitter, which is streaming Thursday Night Football) will have a rough time competing against incumbent owners of sports broadcasting rights, most prominently Disney's ESPN.
- "Nobody can monetize sports better than ESPN," he said. "If you think about [new entrants] in terms of direct competitors to incumbent sports rights owners," not just ESPN but NBC, CBS, Fox, Turner -- new entrants "have the capital, but would dig deep into their pockets and do something that would be a loss leader and then some. It's gonna be hard for them to compete on an equal playing field, no pun intended."
- Meanwhile, he said the company's $1B investment in streaming firm BAMTech was an "enabler" for Disney in digital video, and that the company's moves are all about an effort to "reach more sports fans" -- a timely opportunity considering Twitter's audience for Thursday broadcasts rose 34% from the prior week, but with a lot of room to grow (327,000 average users per minute, up from the prior week's 243,000).
- After the volume spike in both stocks, TWTR now up 0.8%; DIS down 1.6%.
Mon, Sep. 26, 1:55 PM
- Twitter (NYSE:TWTR) is back on the move, up 1.4%, on reports that Walt Disney (NYSE:DIS) is working with financial advisers to consider a possible bid for the messaging service.
- Disney, for its part, has turned further down on the news, -1.8%.
- Previously: Morgan Stanley considers Salesforce, Twitter deal probability low (Sep. 26 2016)
- Previously: Citi considers Twitter, Salesforce deal unlikely (Sep. 23 2016)
- Previously: Twitter +17% pre-market, M&A speculation recirculating (Sep. 23 2016)
- Developing story ...
Mon, Sep. 26, 1:11 PM
- Citi's Walter Pritchard expressed like sentiment regarding a hypothetical Salesforce buyout of Twitter last Friday.
- Morgan Stanley's Keith Weiss today cites "an inability to see revenue synergies from the combination."
- Further: "Frankly, we struggle to see any near-term revenue opportunities from the combination of Salesforce.com and Twitter that aren’t available today via the current partnership – i.e . social listening/social media management. Vala’s list, while interesting potential opportunities for Twitter, seem to have limited adjacency to the current Salesforce.com solutions portfolio or core customer base. Even the longer-term value add of some insights yielded from Twitter data via Salesforce.com’s developing AI capabilities is difficult for us to see. Predictive marketing capabilities in the Marketing Cloud? Insight into how to better sell to Twitter users?"
- Weiss assumes a $14B-$17B theoretical acquisition range should Salesforce (CRM -0.7%) pursue Twitter (TWTR -3.1%) (based on 5x-7x average forward EV/sales of similar Salesforce transactions).
- Retains Salesforce at Overweight with a $107 price target (current price $69.94).
Mon, Sep. 26, 11:00 AM
- Twitter (TWTR -3.3%) registered an average of 243K viewers per minute during its first Thursday Night Football (Bills-Jets) live-stream along with total worldwide viewership of 2.1M.
- In the second week (Patriots-Texans) of the initiative, average viewers grew to 327K (+34% W/W) while total viewers rose slightly to 2.2M.
- With attention having shifted to buyout speculation toward the end of last week and shares lower today over the lack of a deal and negative analyst comments, growth in the NFL effort, though positive, isn't nearly strong enough to offset some of the greater areas of current investor focus.
- NFL Communications data (week two)
Mon, Sep. 26, 7:49 AM
- Noting lagging mobile growth, decreasing engagement, competitors investing more money in adtech, and a now-greater valuation, Oppenheimer downgrades Twitter (NYSE:TWTR) to Underperform.
- The team says Twitter saw no boost to engagement from the Olympics - disappointing as the platform appeared to be well-positioned to take advantage of this type of event. The NFL experiment is also off to a slow start.
- Shares -2.35% premarket
Fri, Sep. 23, 3:00 PM
Fri, Sep. 23, 1:03 PM
- With Twitter (TWTR +18.2%) and Salesforce (CRM -5.3%) trading in opposite directions on today's buzz, Citi's Walter Pritchard states his position that the likelihood of a deal between the two is low and doesn't like the opportunity for Salesforce should one materialize.
- Pritchard: "While Twitter is involved in the customer service process, we don’t believe it is necessary for salesforce to own Twitter to be able to use it as a medium for customer service. Also, we don’t believe that if someone else bought Twitter, salesforce would be prevented from using Twitter as they do today. Our response, if CRM were to buy TWTR, would be negative. Twitter is profitable and while back of the envelope the deal might not be dilutive, we believe it would fuel concerns that CRM is de-focusing on for “customer” area in a quest to stretch for growth."
- Maintains a Buy rating on Salesforce amid the speculation.
Fri, Sep. 23, 12:45 PM
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Fri, Sep. 23, 9:14 AM