Twitter Inc. has begun talks on a potential sale in what could be the start of a lengthy auction of the high-profile but money-losing social media company.
The company is grappling with stagnant user growth, soft advertising sales and losses running at hundreds of millions of dollars a year, accordng to Reuters.
The difficulties come at a time when the 10-year-old service has evolved into a potent global source of news, entertainment and social commentary.
CNBC, citing anonymous sources, said on Friday that Twitter is in talks with companies including Google and may receive a formal bid soon.
A source told Reuters that Salesforce.com is also in pursuit.
Twitter and Alphabet Inc, Google’s parent company did not respond to a request for comment. Salesforce declined to comment.
Verizon, another company mentioned in media reports on Friday as a possible suitor, said it does not comment on M&A rumors but that it had not submitted a bid for the company.
Twitter shares jumped more than 19 percent to US$22.22 per share on Friday, marking the largest one-day rise since their first day of trading in 2013.
The company now has a market value of about US$16 billion.
Morningstar analyst Ali Mogharabi said Alphabet would be the best acquirer for Twitter since it has not yet been able to crack social media on its own despite several efforts.
“From a strategic standpoint, we think it would be more beneficial for Alphabet as opposed to Salesforce,” Mogharabi said.
Former Google executive Omid Kordestani is executive chairman of Twitter.
Morningstar estimates Twitter could be bought for US$22 per share. Twitter is working with investment banks Goldman Sachs and Allen & Co in considering possible transactions, sources familiar with the situation said.
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