According to The New York Post, two embattled companies have talked about a merger:Â Twitter Inc. (NYSE: TWTR) and Yahoo! Inc. (NASDAQ: YHOO). The trouble is that Yahoo may not remain a public company, and Twitter’s business model is so weak the company may not continue in its current incarnation. Despite these extremely difficult problems, it is Twitter that might buy Yahoo.
Add Twitter to the flock of bidders who have circled Yahoo.
Jack Dorsey’s struggling social network met with Yahoo’s management, led by Chief Executive Marissa Mayer, several weeks ago to discuss a possible merger of the companies, sources told The Post.
At the management meeting, Twitter and Yahoo execs spent several hours hashing out Yahoo’s financials, and whether a strategic combo might make sense, according to sources close to the talks.
One argument against the deal is that if Yahoo is worth more than $3 billion, Twitter might not have the cash. Therefore, the transaction would have to be part cash and part stock. Twitter’s shares have tumbled in the past 52 months from $38 to $15. Yahoo’s board would have a hard case to make that the social network’s stock is a solid currency. Twitter does have $3.5 billion in cash and short-term investments on its balance sheet, which means it would need to deplete all of that.
Twitter also continues to lose large sums of money. Its net loss in the first quarter was $80 million, on revenue of $595 million. The growth of its user base has slowed considerably.
In a Yahoo bidding process that has included an odd bunch of companies, who knows?
Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the
advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
