With possibly only two weeks left in the Twitter sweepstakes, the best news for the company’s sales prospects may be some bad news.
The company has reportedly said it wants a deal in place by the time it reports earnings on Oct. 27. But over the past week, as news emerged that virtually every rumored buyer, save Salesforce.com, had fled for the hills, the company’s stock price fell 25 percent. It was hit particularly hard on Monday, when it fell 11.5 percent in one day.
This puts the company’s market cap at $12.64 billion. Last week, when I mused about Twitter’s weakening sales prospects, its value was hovering around $17.4 billion. Assuming a similar premium to LinkedIn’s $26 billion sale to Microsoft, Twitter would probably have fetched closer to that $18 billion mark before investors gave it a haircut.
So, stock price drops are never good news. But in this case, if it makes obvious acquirers like Google come sniffing back around, it could be a good thing. Ideally, Twitter would have at least a couple of buyers who are hot for it and willing to engage in a little bidding war.
If not, the company is looking at having little leverage as it chooses between one low-ball offer and remaining independent. If it chooses the latter, you can expect investors to probably take another whack at the stock price.