Twitter plunges as buyout hopes fade

The Twitter logo displayed on a banner outside the New York Stock Exchange (NYSE) in New York City.
The Twitter logo displayed on a banner outside the New York Stock Exchange (NYSE) in New York City.PHOTO: AFP

SAN FRANCISCO (AFP) - Twitter shares went into a tailspin on Thursday (Oct 6) as hopes faded for a buyout for the struggling social network.

Shares in Twitter sank 20 per cent to close at US$19.87, giving back most of the gains from speculation in recent weeks of a buyout by a major tech or media group.

On Wednesday, technology news site Recode said Google parent Alphabet would not pursue a Twitter acquisition. Google had been seen by some observers as one of the more likely purchasers.

Neither Twitter nor Google responded to a request for comment.

Recode also reported that other potential suitors were also cooling – that Apple was unlikely to pursue a bid and that Disney had no plans to make an offer.

Talks remain active between cloud computing group and Twitter, according to some reports.

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

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.

Twitter was expected to begin accepting bids this week, reports said.

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