SunTrust Narrows the List of Twitter Buyers Down to 6

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One thing that has always amazed many on Wall Street is for the wide adoption and use of Twitter Inc. (NYSE: TWTR), especially by very high-profile people, the company regularly disappoints on earnings and often misses important metrics like monthly average users. As of the second quarter of 2016, the microblogging service averaged at 313 million monthly active users.

A new research report from SunTrust Robinson Humphrey and its widely respected tech analyst Robert Peck notes that with big players like Salesforce, Google, Apple and Disney all unlikely to bid, the list is narrowing. The report says:

We think there are various aspects of potential bidders to consider: size of the bidder; revenue and cost synergies; brand protection; and what the data & Twitter ecosystem bring to an acquirer.

The firm also notes that it has pared its list of potential buyers down to six companies to account for last week’s reports, and also notes that it is possible that a prominent international company could step in as a potential buyer. SunTrust rates the stock Neutral.

Here are the six companies mentioned as potential bidders:

  • AT&T Inc. (NYSE: T)
  • Comcast Corp. (NASDAQ: CMCSA)
  • International Business Machines Corp. (NYSE: IBM)
  • Microsoft Inc. (NASDAQ: MSFT)
  • Oracle Corp. (NYSE: ORCL)
  • Verizon Communications Inc. (NYSE: VZ)

These are blue chip large cap companies have the wherewithal and the deep pockets to make such an acquisition, and despite the up and down nature of earnings from Twitter, it is an interesting franchise that under better corporate leadership could prosper.

It’s also important to remember that with some changes to make the venue perhaps more user-friendly, and also a campaign to perhaps advertise the capabilities, new users could be added. Many millennial and Generation X users use the service almost exclusively for news and information. One thing though does seem certain: very soon Twitter may have a new corporate parent, and a big one at that.