Twitter Inc shares spiked much higher on Monday ahead of a Google Inc announcement of a change in its structure. Google will become Alphabet later on this year, and Twitter may be able to benefit from the big changes at the search giant.
Victor Anthony, of Axiom Capital, drew attention to a little noticed change in the Google roster that may have big implications for Twitter.
Anthony noted that Omid Kordestani, who was Google’s Chief Business Officer, is now just listed as an advisor to Alphabet. That means that though Anthony though him unable to take the job, it “looks like he is available now.”
Twitter shares spike on Dorsey buy
Twitter shares sold for $29.49 at close on Monday afternoon, a gain of more than 9 percent for the full day’s trading. The spike appears to have been brought on by CEO Jack Dorsey, and other execs, buying shares in the firm, and a new content deal with the NFL.
Mark May of Citigroup warned traders not to read too much into the insider buys when he appeared on CNBC on Monday. He said that the buying by Dorsey, board member Peter Currie and others was overpowered by the amount of shares they’ve sold in the last year.
The massive spike in shares came after weeks of losses, and Twitter is still far from where it was six months ago before the real chaos set in. What the firm needs, according almost all of the research houses on Wall Street, is to confirm a leader that can bring growth to the platform.
We’ve had a lot of rumors about a leader, with Sheryl Sandberg and Renee James the latest names brought up, but nothing concrete from Twitter itself.
Kordestani’s job title change may simply be because Google hasn’t yet fixed his place in the firm’s new structure. He may become the CEO of one of the parts that make up Alphabet or, as Victor Anthony seems to think, he may be getting ready to leave Mountain View.
Twitter picks through Google chaos
The significance of the Google-alphabet change for Twitter can not be seen clearly, but it will have an effect across the industry. We’re likely to hear a lot of rumors about Alphabet buying Twitter, just as we’ve heard a lot of stories about Google pulling the trigger on the deal in recent months.
If Twitter were to be bought out, it’s not likely that the Alphabet structure will make a difference. Twitter would have to become part of the Google business inside of Alphabet, meaning that its place in the structure won’t be made simpler by the change.
On the other hand Google’s creation of itself as a conglomerate could make it more eager to spend money on a firm like Twitter.
The new Google could supply Twitter Inc with a new CEO, or a solid partner. On the other hand, it may do neither. With the huge number of rumors about Twitter flying, it’s vital to not believe what you hear about the firm until there is some kind of concrete backing for it.