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Selling The Rumors? Twitter Has Now Lost Almost All Of Its M&A Talk Gains

Selling The Rumors? Twitter Has Now Lost Almost All Of Its M&A Talk Gains

Shares of Twitter Inc (NYSE: TWTR) fell more than 18 percent Thursday as investors piled into the stock over the past two weeks on hopes it will be bought at for a premium.

Twitter's M&A saga began on September 23 and Twitter investors woke up to another Wall Street analyst turning negative on the stock. RBC Capital Markets' Mark Mahaney downgraded Twitter to Underperform from Sector Perform.

Twitter's stock reacted accordingly was trading in the red during the pre-market session. However, CNBC's David Faber reported that Twitter "received expressions of interest from several technology companies and may receive a formal bid shortly."

Twitter's stock closed at $18.63 on September 22, but following Faber's report, shares immediately gained more than 20 percent and traded above $21 per share mark.

Twitter's stock closed at $22.62 on that Friday.

Related Link: Here Is Every Twitter Takeover Rumor Of 2016

Investor optimism for a Twitter buyout carried over the following week and closed at $23.37 on Monday, $23.72 on Tuesday, $22.96 on Wednesday, $23.01 on Thursday and $23.05 on Friday.

Things got interesting this week after The Wall Street Journal reported Tuesday that Twitter is expected to receive a buyout offer from, inc. (NYSE: CRM).

WSJ's report boosted Twitter's stock as high as $25.25 on Wednesday and closed the day at $24.87; Twitter's stock hasn't traded north of $25 at all this year.

Aside from Salesforce, Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and even Walt Disney Co (NYSE: DIS) have been reported to be taking a close look at buying Twitter.

Optimism for a buyout was short-lived following a Recode report Wednesday night, which suggested that every company that may have expressed interest (except Salesforce) in buying Twitter don't plan on proceeding with a formal bid.

Yun Kim of Brean Capital suggested the company could only afford to place a bid that is "meaningfully lower" than its current share price which would make it nearly impossible to be approved by Twitter's board.

Thanks to today's decline, Twitter's stock has given up the vast majority of the gains it notched on M&A talks, trading recently at $20.33.

Posted-In: David Faber ReCode twitter Twitter AcquisitionNews Rumors Movers Trading Ideas


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