Bob Peck: Twitter Isn't For Sale

Bob Peck and his team at SunTrust don't believe Twitter Inc TWTR is up for sale, responding to reports that Steve Ballmer and Saudi Arabian Prince Al-Waleed bin Talal were interested in acquiring the social media company for $22 to $26 per share.

While the firm tends to avoid commenting on “unsubstantiated investor conjecture,” the surge of more than 7 percent in Twitter’s stock led them to weigh in this time.

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The firm  shared two main reasons to believe the company is not for sale at the time:

• 1) CEO Jack Dorsey returned to his position only a year ago.
• 2) They think the re-formed board supports Dorsey and would like to give his turnaround plans some time to prove successful.

The report went on to explain why SunTrust analysts think Private Equity bids don't make much sense for Twitter, mainly citing financial reasons like the fact that employees would no longer receive stock compensation, leading to a more expensive deal, and the fact that such an acquisition would bring “no overlapping synergies to take out costs.”

Conversely, the analysts believe a “a strategic acquirer would make the most sense due to the leverage (technology, personnel) it could provide and the synergies to make it attractive.”

Having said all of this, SunTrust still remains confident in its belief that a takeover is unlikely, at least until next year.

SunTrust maintains a Neutral rating and $18 target on shares of Twitter.