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Twitter Spikes 8+ Percent On Fake Takeover Report; Bob Peck Weighs In

Twitter Spikes 8+ Percent On Fake Takeover Report; Bob Peck Weighs In

Shares of Twitter Inc (NYSE: TWTR) spiked Tuesday afternoon by more than 8 percent on a fake report that the company has received a takeover bid.

Bob Peck, SunTrust managing director, was on CNBC to discuss why he thinks that the report was a mere rumor and the company is not currently a takeover target.

No Target Here

"We don't think that it's likely, and there is a couple of reasons why," Peck began. "One is, if there were a potential deal on the table, we don't think they would have gotten through this whole CEO transition. Number two, we think the board and the company think the stock is worth more than where it is today.

Related Link: Bloomberg Confirms Twitter Story Is Fake

"You are selling at recent lows here. And they are just starting to roll out new products they think will hit and therefore will drive the value up."

He continued, "Also, if you look at the premium side in the article, it's only a 20 percent premium. So, why would you take that here? Especially if you are rolling out new products.

&quotThey [industry contacts] don't think it's that likely. And even Anthony Noto, the CFO, said recently at a conference that they have not hired bankers. So, we don't think the report is likely."

Caution Ahead

On the stock moving above its 50-day moving average, Peck said, "I think a lot of clients here are looking to see if the stock has bottomed out here. The expectations for 2Q are about as low as they can go, and we have cautioned investors on two things.

"One is, we don't know if the user metrics, which we point out could actually decline for the first time ever. And number two is, the guidance could also be weak if they are going through this transition."

Image Credit: Public Domain

Posted-In: Anthony Noto Bob Peck CNBC SunTrustAnalyst Color Tech Media Best of Benzinga


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