PREFACE
Twitter Inc. (NYSE:TWTR) is now fully a takeover rumor stock, and it appears that Alphabet Inc. (NASDAQ:GOOGL) is getting closer to making a bid.
STORY
Twitter Inc. stock has been on a roller coaster ever since news bombarded the market of a possible takeover bid from several companies including Disney (NYSE:DIS), Verizon (NYSE:VZ), Salesforce.com Inc. (NYSE:CRM) and of course, Alphabet Inc. (NASDAQ:GOOGL).
Verizon quietly stepped away from the limelight, but Salesforce.com Inc. did not. Then rumors came about that Disney was working with Bank of America for a potential bid. The Alphabet Inc. Google story stayed pretty quiet, until now.
Bloomberg has reported that Alphabet Inc.'s Google is now working with a financial advisor to prepare a bid for Twitter Inc. Google has chosen Lazard Ltd, according to Bloomberg, but the hire was for an exploratory view, rather than a hard and fast bid.
In English, like Disney and Salesforce.com Inc. have been rumored, Alphabet Inc. (NASDAQ:GOOGL) is kicking the tires, or in less opaque words, is valuing Twitter Inc. as entity if it were to be enveloped.
Twitter Inc. (NYSE:TWTR) has reportedly hired Goldman Sachs to do its M&A work and a $30 billion valuation was floated by the company as a 'fair price.' If we turn that $30 billion number into a stock price, we get about $42, or about 90% higher than the close on Friday, which is already 20% higher than when these rumors started.
Twitter Inc. may believe that's its value, it may be trying to dissuade a bid, or it may just be gamesmanship. We will never really know, until... we do.
For now, owning Twitter Inc. (NYSE:TWTR) stock has been a little bit like Alice falling down the rabbit hole in Wonderland -- we never really know where it's going to land. But, of all the reported bidders in play, Alphabet Inc. (NASDAQ:GOOGL) does make a lot of sense given the deep inroads the two companies have made as partners, and their uniform competition with Facebook Inc. (NASDAQ:FB).
The author has no position in Alphabet Inc. (NASDAQ:GOOGL) and is long shares of Twitter Inc. (NYSE:TWTR).
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