The Twitter Buyout Rumors Are Bogus, But Still An Idea

I guess it’s that time of year again: time to bounce around baseless Twitter (TWTR – Analyst Report) buyout rumors. The latest would-be purchaser is News Corp (NWS – Snapshot Report) (NWSA – Analyst Report), joining the ranks of formerly-rumored buyers like Facebook (FB – Analyst Report), Alibaba (BABA – Analyst Report), and Apple AAPL).

On Wednesday, rumors that News Corp was interested in scooping up the embattled social media site sent Twitter’s stock soaring as high as 12%. These gains fell down to the 4% range after a News Corp spokesperson told Re/Code bluntly, “The rumor’s untrue.”

There it is, folks. Pack your bags and move along, nothing to see here. Just another baseless Twitter buyout rumor.

Now wait… you’re telling me Twitter is up another 4% today? People are still talking about a possible buyout?

Well, shoot. You got me. Let’s talk about a possible Twitter buyout.

Not A Bad Idea

Whether or not the News Corp rumors hold any truth don’t change the fact that a buyout could be could for Twitter, and with share prices near record lows, now would certainly be the time for a buyer to step in.

There are basically two schools of thought here. The first is probably the mindset of many Twitter investors who are fed up with the company’s lackluster performance. Twitter simply hasn’t been able to grow its user base a significant amount, and the company has struggled to cash in on existing users anyway.

Recently re-hired CEO Jack Dorsey is splitting his time between Twitter and his mobile payments startup Square (SQ – Snapshot Report), and his recent moves, such as the launch of the Moments feature and proposed increase of the 140 character limit, don’t seem to be exciting investors all that much.

With share prices near all-time lows, a company looking to buy Twitter could make its move now at the lowest possible cost. It’s often been said that having Twitter be a part of a larger company could open up new revenue streams or boost user growth. Also, Twitter doesn’t currently offer preferred shares, so it wouldn’t be too difficult for a single motivated activist investor to start making moves.