Twitter shares dive after Google rules out bid

Twitter, which celebrated its 10th anniversary this year, has yet to make a profit. Speculation is rife that it is putting itself up for sale but no suitors have declared interest publicly.
Twitter, which celebrated its 10th anniversary this year, has yet to make a profit. Speculation is rife that it is putting itself up for sale but no suitors have declared interest publicly.PHOTO: REUTERS

SAN FRANCISCO • Twitter shares plunged in after-hours trading on the heels of a report that Google does not plan to bid for the culture- changing but unprofitable one-to- many messaging service.

Technology news website Recode cited unnamed sources close to the situation as saying Google will not be among those in the running to buy Twitter.

Other sources said that Twitter should have "low expectations" of Apple being among those vying to buy the company, Recode reported.

Twitter shares, which jumped 5.7 per cent to US$24.87 at the close in New York on Wednesday on renewed speculation about a takeover, slid as low as US$20.73 in early trading.

Speculation that Twitter is putting itself up for sale has boiled over in recent weeks, with the share price buoyed by unconfirmed talk that business-cloud software titan Salesforce, Google and other Silicon Valley titans were expected to be suitors. Twitter and Google did not respond to requests from news agency Agence France-Presse for comment.

On the other hand, Salesforce. com shares fell 5.8 per cent on Wednesday on concern the business software company may make a bid for Twitter. Salesforce chief executive officer Marc Benioff declined to comment directly on a potential Twitter acquisition during an appearance on CNBC.

Twitter, which celebrated its 10th anniversary this year, has yet to make a profit.

Co-founder Jack Dorsey returned as chief executive last year but has yet to ignite growth, with the number of users stagnating at slightly more than 300 million for several quarters.

After falling to its lowest point earlier this year, Twitter shares were boosted recently on hopes the company will gain traction or make a promising match with a suitor. Twitter was expected to begin accepting bids this week.

The social messaging platform would be a big-ticket item, with its value based on the share price topping US$17 billion (S$23 billion) on Wednesday, and the company likely to want a premium to be paid.

However, no suitors have declared interest in Twitter publicly. The list of companies that may still seek to buy Twitter includes entertainment giant Disney, Microsoft and the US telecom service Verizon.

AGENCE FRANCE-PRESSE, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 07, 2016, with the headline 'Twitter shares dive after Google rules out bid'. Print Edition | Subscribe