Twitter shares take flight on takeover deal rumour

Twitter shares were up more than 8 per cent to US$18.15.
Twitter shares were up more than 8 per cent to US$18.15. PHOTO: REUTERS

SAN FRANCISCO (AFP) - Twitter shares shot up on Monday (Feb 1) amid reports of a possible deal with big-name investors to take over the struggling Internet firm.

Twitter shares were up more than 8 per cent to US$18.15 at about 1720 GMT (1.20am Tuesday Singapore time).

The market reaction was fuelled by a report at technology-industry focused website The Information that venture capital powerhouse Marc Andreessen and the firm Silver Lake Partners are considering a deal, perhaps to acquire or take a controlling stake in Twitter.

The Information cited unnamed sources said to be close to the matter, and said it did not know whether the talks were still taking place.

Twitter has been the target of takeover talk in the past, but none of the rumours have played out.

The latest report came fresh on the heels of the firm announcing it is overhauling its top management in a major shake-up, as the social network struggles to boost its profitability and growth prospects.

CEO Jack Dorsey last week confirmed the overhaul, explaining that some top managers "have chosen to leave the company." Mr Dorsey is currently managing two firms, Twitter and mobile payments start-up Square - both multi-billion dollar companies struggling to achieve profitability.

He is credited with coming up with the idea for Twitter when eventual co-founder Evan Williams gave workers at blogging start-up Odeo two weeks to work on fun new projects as a way to break up their daily routine.

Mr Dorsey ran Twitter from 2007-2008 but was pushed out of the CEO chair. He was reportedly a better engineer than a boss, known to leave the office early for personal pursuits such as sewing or yoga classes.

He returned as interim chief executive after then-CEO Dick Costolo resigned last June, and took the job on a permanent basis in October, as Twitter deals with persistent concerns over its growth prospects.

Twitter stock recently hit a new record low and the number of users has been increasing more slowly than the company would like.

At the end of September, it had 320 million active users - four million more than three months earlier.

User growth, or the lack thereof, will be among the things investors will be watching for when the one-to-many messaging service reports its latest quarterly earnings on Feb 10.