Twitter Next To Pair Up


Posted June 27, 2016 by shinseicorporate

Consolidation in technology and social media could see micro-blogging service absorbed by large suitor.

 
If price action in Twitter’s stock is anything to go by, the San Francisco-based micro-blogging social media company could be the next bridesmaid in the technology/social media consolidation trend.

Just last week, LinkedIn, the largest professional social networking site and software giant, Microsoft announced a tie up worth $26.2 billion in cash. Since that announcement, Twitter’s shares have rallied by as much as 17% on potential deal speculation.

“Before the announcement of the LinkedIn/Microsoft deal, Twitter’s shares were trading at less than half of the $26 they fetched at the company’s hyped initial public offering,” said Florian Croix, a technology analyst at Shinsei Corporate Management.

Considering the similarities between Twitter and LinkedIn, the sudden speculation on a potential bid windfall is hardly surprising but there is skepticism over the value in Twitter’s user base.

“LinkedIn at least has 430 million professionals registered, most with a huge amount of detail about their personal and professional lives so it’s easy to see why Microsoft was interested given its desire to break into social media and its ambitions for its SaaS (software as a service) packages like Office 365,” added Croix.

“Twitter, however – even with its 310 million monthly active users – is still a little confusing to users and that uncertainty over its value could very well be shared by potential suitors.”

Shinsei Corporate Management has had a sell rating on Twitter stock for the past 18 months and, with the recent rally, it is advising clients with holdings to sell into strength.

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Categories Computers , Social Media , Technology
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Last Updated June 27, 2016