Walt Disney Co may be close to buying Twitter if sources are to be believed. Here is how Twitter Inc reacted to Walt Disney Co rumors. Disney’s bid may be the last hope for Twitter stock. Twitter Inc (TWTR) shares surged in after-hours trading on Tuesday and stayed ahead Wednesday. They were fueled by the rumor that Walt Disney Co is once again considering taking over the struggling social platform. Betaville’s Ben Harrington reported that the firms are now going ahead with the deal after agreeing on a price. As per Harrington, the takeover price will be set somewhere in the high $20s.
Walt Disney Co Reconsiders Twitter Bid
Twitter stock reacted to the news, popping 4% after-hours trading to $18 per share while hovering around $17 per share through most of Wednesday, even though Betaville attached a disclaimer to the report saying that it should be taken as “market gossip that hasn’t been tested through formal journalistic channels.” Wall Street is eagerly waiting for Twitter to be acquired. The firm is set to report its earnings this morning (Thursday), and as per analysts, there will be nothing exciting about it.
However, there is a little hope as the firm has historically outperformed estimates for the past seven quarters. Analysts are expecting the firm to report adjusted earnings of 9 cents per share, a drop from 10 cents per share in the third-quarter of last year. Revenue is expected to come in around $603.8 mn, an increase from $569 mn in the previous year’s third quarter. As per Youssef Squali of Cantor Fitzgerald, monetization is expected to decline, just as it did in the second quarter.
Does Twitter (TWTR) need a full-time CEO?
Investors and analysts would also like to know if the firm is in need of a full-time chief executive after its disappointing performance. James Cakmak, an analyst at Monness, Crespi, Hardt, said in a note, “We believe it is imperative for Mr. Dorsey to come on board full-time given his sway as a founder, and if he’s not willing to do so, then we argue Twitter needs to find someone else who will.”
Also there are reports that Twitter could soon announce plans to lay off around 8% of its workforce. This will reportedly result in the exit of about 300 employees. As per Bloomberg, the layoff announcement may come before the results today morning. Mounting losses and around a 40% drop in the share price has made it difficult for the firm to pay its engineers in stock, noted Bloomberg. Further, competitors like Alphabet Inc’s (GOOGL) Google and Facebook Inc (FB) are almost crushing Twitter to death. On Tuesday, Twitter Inc (TWTR) shares closed down 4.27% at $17.26. Year to date, the stock is down more than 22%, while in the last year, it is down 43%. The stock has a 52-week high of $31.87 and a 52-week low of $13.73.
As far as Walt Disney Co goes, if the buyout of Twitter is successful, it will definitely be big news for both. On the Q3 2016 earnings call with analysts, Disney Chief Executive Bob Iger said the firm aims to launch the direct-to-consumer ESPN streaming service “probably by the end of the year.” It was also said at the time of the earnings release that Disney has the option to acquire majority ownership in BAMTech, which had been a part of New York-based MLB Advanced Media, the league’s digital arm.