Analysts see Twitter as a prime target for a buyout, and billionaires like Jeff Bezos, Mark Zuckerberg, and even Warren Buffett should be licking their chops. | Source: REUTERS/Anushree Fadnavis
- Twitter looks like a prime candidate for a splashy buyout, according to BTIG.
- The social media giant has turned a profit under Jack Dorsey, but the CEO has come under pressure from activist investors.
- Here are three billionaire sharks who could take TWTR stock to the next level.
Despite enjoying a massive surge in user activity during the coronavirus lockdown, Twitter (NASDAQ: TWTR) stock is still trading well below its IPO day close of $44.90.
While it sometimes seems like CEO Jack Dorsey is less-than-enchanted with the beast he created, the social media giant has shown strong glimpses of profitability.
With Twitter among BTIG’s top targets for an acquisition, here are three billionaires who are flush with cash – and might just leap at the opportunity to take it off his hands.
1. Jeff Bezos – Amazon
If anyone can turn Twitter into a money-printing machine, it’s Jeff Bezos. | Source: SAUL LOEB / AFP
The world’s richest man and the leader of the Amazon leviathan, Jeff Bezos has made it his mission not just to lead, but to dominate every sector of the e-commerce market.
And yet the billionaire has made few forays into the social media business, with only Amazon Spark to show for his troubles. (Don’t worry, I hadn’t heard of it either.)
If anyone has the cash to reform Twitter into the money-printing machine its brand reputation suggests it should be, it’s Jeff Bezos. It’s not often that a company that holds a monopolistic position in one industry has an opportunity to purchase a near-monopoly in another sector.
The retail billionaire already owns the Washington Post, so he’s no stranger to media. Twitter would be yet another avenue for him to continue to spread his influence.
Would this fit with Dorsey’s freedom of speech mandate? Probably not, but it’s been a long time since acquisitions took founders’ feelings into account.
2. Mark Zuckerberg – Facebook
Twitter has spurned Mark Zuckerberg’s advances before. But what if he makes another overture? | Source: REUTERS/Leah Millis/File Photo
Facebook founder Mark Zuckerberg has tried to purchase Twitter on a few occasions. It’s simply a near-perfect fit, and it would crown the tech billionaire as the true king of all things social media.
There’s a reason Zuckerberg’s overtures came to nothing in the past. But that doesn’t mean he shouldn’t keep the prospect of an acquisition on his radar. Especially now.
Facebook stock is still holding close to record highs despite the economic turmoil caused by the coronavirus, and absorbing Twitter into their product family could be deceptively seamless.
Facebook (light) and Twitter (dark) stock have had very different paths since their IPOs. | Source: Yahoo Finance
Facebook has proven extremely efficient at finding ways to monetize its products, and synergizing its flagship apps could be a big boost to Twitter’s bottom line. Would Congress like this? It’s unlikely. Would shareholders? Absolutely.
3. Warren Buffett – Berkshire Hathaway
Berkshire Hathaway could swallow Twitter without taking too large a bite out of its cash pile. | Source: REUTERS/Scott Morgan
OK, this one is a stretch – but maybe less of a stretch than you think.
Most conventional wisdom says a tech company like Google parent Alphabet is a far better candidate for a splashy Twitter buyout than an aging dinosaur like Warren Buffett and his tired stable of consumer staples.
Yet this is precisely what makes Twitter the ideal candidate for the Oracle of Omaha. Buffett has recently had to eat humble pie for his failed airline investments (and subsequent divestment) and needs his next blockbuster acquisition to pay off.
With a $137 billion war chest, the billionaire has a noted affinity for monopolies and has recently made “modern” moves with purchases of Apple and Amazon stock.
Twitter has all the hallmarks of a monopoly. It dominates its corner of the social media space completely, with no genuine competitors. And the best part? Its market cap is just $22 billion.
With one of the stickiest brands out there, Buffett needs to follow his own rules and spend a small slice of his cash hoard on a company that has become systemically vital to the information superhighway.
Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com. Unless otherwise noted, the author has no position in any of the stocks mentioned.
This article was edited by Josiah Wilmoth.
Last modified: May 9, 2020 3:12 PM UTC
