Twitter shares plunge on report bidders are scarce

Thu Oct 6, 2016 4:44pm EDT
 
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(Reuters) - Twitter Inc TWTR.N shares plunged on Thursday as fears mounted that a much-anticipated auction of the social media company will draw minimal interest from potential buyers.

With stagnant user growth and continuing losses, Twitter's board agreed last month to consider a sale, and has told potential acquirers it wants such deliberations to conclude by the time it reports third-quarter earnings on Oct. 27, Reuters reported on Wednesday.

Technology website Recode reported later on Wednesday that Alphabet Inc's Google GOOGL.O, long considered the most logical buyer for Twitter, and Walt Disney Co (DIS.N: Quote) would not bid for the social network, leaving cloud software company Salesforce.com CRM.N as the only known suitor.

Twitter shares fell as much as 19.2 percent to $20.10, valuing the company at about $14.2 billion. They closed 20.1 percent lower at $19.87.

Salesforce Chief Executive Mark Benioff has publicly expressed his interest in Twitter in recent days, but stopped short of saying the company had decided on a bid.

Analysts said he downplayed the possibility in a meeting with investors on Wednesday, sending Salesforce shares up about 4 percent.

"I'm not saying I'm buying it, but I'm not saying I'm not buying it," Benioff said on Wednesday in an interview with the New York Times.

Even at $20, Twitter shares are well above the $14 they were trading at before speculation about a possible acquisition began to emerge this spring.

Many investors and analysts believe Twitter remains expensive for most potential buyers, but the company does not have a clear back-up plan if it is not acquired.   Continued...

 
People holding mobile phones are silhouetted against a backdrop projected with the Twitter logo in this illustration picture taken in  Warsaw September 27, 2013.   REUTERS/Kacper Pempel/Illustration/File Photo