SunTrust: Twitter Mulls Acquisition With $1.3 Billion Note Deal

Twitter Inc.'s

plan to raise $1.3 billion in a private placement of convertible notes suggests it may be mulling an acquisition. SunTrust's Robert S. Peck said Wednesday that raising capital for a rainy day at currently attractive rates is "prudent." But he added that Twitter "may have more strategic uses for the proceeds." Peck singled out privately held Flipbook Inc. as one potential deal. Flipbook, Palo Alto, Calif., is a start-up content aggregater that last year raised $60.5 million from investors that included Twitter co-founder Jack Dorsey, as well as Twitter investors Suhail Rizvi and Goldman Sachs. The deal a year ago valued Flipbook at $800 million. Twitter estimates its actual "reach" through third-party systems is two-to three times the company's 27 million direct monthly active users. "An asset that addresses this issue, like Flipboard, might be interesting," Peck said. "We point this out merely as a possibility that makes sense," Peck said. Other fields for Twitter might include ad tech, video curation, e-commerce or analytics, Peck said, maintaining a Buy. Given the private placement which Peck expects to quickly close, he figures Twitter has access to $3.5 billion in cash. Twitter traded recently at $53.12, nearly unchanged.