Wall Street On Twitter Rumors: Stop Trying To Make Disney Happen, It's Not Going To Happen
Wall Street analysts are certainly busy this week dissecting the seemingly never-ending round of Twitter Inc (NYSE: TWTR) acquisition rumors. There is however one key theme - analysts for the most part aren't overly optimistic and enthusiastic over a potential deal.
Citi's Mark May suggested Twitter's "struggles and steep valuation" makes any acquisition at a meaningful premium "less likely."
Loop Capital's David Miller commented on Walt Disney Co (NYSE: DIS)'s name being thrown in to the mix, noting that the company places a great amount of emphasis on ROIC (return on invested capital) and at current prices, Disney won't achieve the financial metrics it has seen in prior acquisitions.
Alan Gould of Brean Capital also suggested there is no strategic benefit for Disney to acquire Twitter. For starters, buying Twitter won't help Disney and its ESPN segment overcome the trend of cord cutting.
Gould added that the most Disney paid for an acquisition is $6 billion for Pixar.
Meanwhile, Disney's minority stake in BAMTech already gives the company the necessary infrastructure to provide its services directly to consumers.
Perhaps most importantly, the analyst is questioning if Disney even has the in-house talent to turn around Twitter.
Bottom line, even though Twitter CEO Jack Dorsey sits on Disney's Board of Directors, this doesn't mean that Twitter is "the right fit for the price being asked."
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|Nov 2016||Deutsche Bank||Upgrades||Hold||Buy|
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