Twitter Stock Moves Higher On Renewed Google Buyout Rumor

Twitter Inc (NYSE:TWTR) stock edged upward by as much as 3% in afternoon trading today after the rumor of an acquisition by Google (GOOGL) resurfaced. Of course Twitter shares didn’t rise all that much simply because this rumor has popped up about once a year for the last five to six years.

Twitter TWTR

By now, Wall Street has probably tired of the rumor, and most investors probably have taken it with a grain of salt. But is it for real this time? Probably not.

Would Google really buy Twitter?

SunTrust Robinson Managing Director Robert Peck addressed this latest round of speculations on CNBC’s Halftime Report. He pointed out that Google Inc management is probably aware that Twitter “is the best real-time search engine out there.” As a result, he seems to think it’s a combination that makes sense.

Before Twitter went public, the speculated valuations for the company ranged from $10 billion to $20 billion. The micro-blogging platform’s market capitalization is now about $24.33 billion, although Peck thinks it would take more than $40 billion to get the deal done.

Could Google acquire Twitter?

He said this is possible for Google, which has about $60 billion in cash or $45 billion excluding taxes. However, he added that it would be difficult because it would take such a huge bite out of the search giant’s cash, especially at Twitter’s current share price levels.

Peck also said he thinks Twitter management would “probably want a pretty big number” from Google because the company’s share price has been near its lows and they think they can execute well and fix the problems, so they think Twitter’s stock price will go up.

Should Google buy Twitter?

CNBC Business News’ John Fortt pointed out that if this deal really did happen, it would be one of the biggest tech acquisitions ever. Of course Google has gobbled up big technology companies before, as it acquired Motorola (although the result wasn’t great) and now Lenovo Group Limited  (OTC:LNVGY) (HKG:0992) is buying Motorola from Google.

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Moon Kil Woong 5 years ago Contributor's comment

Yawn. Double Yawn.