Twitter Stock Could Face More Stress after Salesforce Scraps Acquisition Bid

Twitter Stock Could Face More Stress after Salesforce Scraps Acquisition Bid

Twitter stock declined in the last trading session after Salesforce announced that the company isn’t interested in buying out social networking platform. Twitter stock has been under pressure as the company has failed to improve its financial situation. Twitter has been losing revenue and market experts are expecting lower earnings in the upcoming earnings call from Twitter.

Twitter Chief Executive Officer Jack Dorsey might have to look at other options for social network which has been facing tough competition and stagnant growth in user base. Snapchat and Facebook’s Instagram are major competitors for Twitter.

Last month, there were reports about Alphabet or Disney looking at acquiring controlling stake in Twitter. However, later reports suggested that both the companies were not interested in taking control of Twitter. Salesforce remained the only suitor for Twitter. After Salesforce announced its decision to not go ahead with Twitter’s acquisition, the company will have to look at growth and financial numbers before it can find anyone interested in buyout.

“In this case we’ve walked away. It wasn’t the right fit for us,” Marc Benioff, chief executive of Salesforce. Mr. Benioff was under pressure as Salesforce investors were not happy with the idea of Cloud software company acquiring Twitter. Benioff added that after considering many factors and not only acquisition price, Salesforce decided to walk away from the deal.

After Salesforce announced its decision to scrap the plans to acquire Twitter, the stock jumped more than 5 percent during the trading session. Twitter’s stock closed 5 percent lower at $16.88 on Friday.

Twitter reported losses worth $400 million last year. Market experts consider the company too expensive at its current market valuation of $12 billion. Other than financial matters, Twitter also faces leadership issues. Jack Dorsey returned as Chief Executive Officer Jack Dorsey last year. But, he serves as CEO for Twitter and payments company Square.

Twitter will report its quarterly earnings on October 27. The company has not reported profit for last 11 quarters. For the last two quarters, the company has missed Wall Street expectations.


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