Over the last week Twitter Inc. (NASDAQ:TWTR) shares have performed pretty well, increasing more than 10% on rumors former Microsoft head Steve Ballmer and Saudi Prince Alwaleed bin Talal were thinking about partnering and taking the company private.
The deal makes sense on the surface. Many think Twitter is undervalued after falling more than 50% from its 2013 IPO. Both Ballmer and the Prince already own big chunks of stock. And it’s often much nicer to try and turn a company around when it’s privately held, rather than having the eyes of Wall Street watching your every move.
But this isn’t the only viable Twitter buyout rumor. Microsoft is often mentioned as a potential acquiror. It has plenty of capital, and it could use the same infrastructure it uses to sell Bing ads to increase Twitter’s use as an advertising portal. And remember, Microsoft has alreadyacquired LinkedIn, showing it has an appetite for social media companies.
Facebook is less likely, but the possibility still exists Mark Zuckerberg will make the decision to acquire Twitter. Many people feel Twitter’s management team is somewhat lacking. Having Zuckerberg in charge of Twitter instantly adds credibility.
Finally, there’s private equity potential, which seems like the most likely outcome. Venture capitalists like Marc Andreessen and Carl Icahn’s names have both been linked to Twitter, as well as Ballmer and the Saudi Prince. Each of these people have the ability to get the $17-$20
billion it would likely take for a Twitter buyout.
