Twitter, (TWTR) Inc. is no stranger to buyout rumors and February is proving to be yet another month of more of the same. The microblogging site that was co-founded by Jack Dorsey back in 2006 has seen its stock price plunging over the years and with no end in sight for the declines there is speculation that a buyout could be in the offing. Before we get into the nuts and bolts of the matter, it should be remembered that Twitter has often been subject to these types of jolts. Talk of a buyout at Twitter is par for the course with this social media giant. The latest buzz is that Silver Lake under investor Marc Andreessen may be lining up to purchase Twitter at its current price.
On Monday 1st February, Twitter (TWTR) stock spiked 10% as speculators cashed in on the sentiment. The consensus is that this was nothing more than hearsay; but who really knows? The exact wording used by those in the know was that Andreessen had considered some sort of deal. The transaction under consideration is known as a PIPE deal. It is an acronym for private investment in a public entity. This is typically the case when a public company is in need of funding and investors on the stock markets aren’t willing to offer up cash. Talk of a buyout is nothing new for Twitter. There have been various discussions about companies wanting to buy Twitter, including one about News Corp but Rupert Murdoch denied this. Twitter was initially floated at $26 at the IPO, but has plunged 30% from that level. In the aftermath of rumors like this, the stock tends to appreciate in price and call options are the sensible option.
On a ratings scale of 1.0 (strong buy) to 5.0 (strong sell) Twitter is ranked at 2.6. The mean target price is $30.41, and the high target price is $48. The low price for Twitter is $14. In terms of upgrades and downgrades, the trend has largely been exceptionally bearish as one might expect. The following history of upgrades and downgrades has been recorded:
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