“Why Twitter?”, “Who will buy?”, “Why will they buy?” These are the questions that engulfs my thinking mind when I dwell into this deal. So, today, I’m going to present my thoughts on this possible transaction and how the potential acquirers are positioned in relation to this sale transaction. I’ll try to simplify my views under the respective headings and present my opinion to my Readers in an easy-to-comprehend manner. I welcome Reader’s thoughts and views on my article.
What makes Twitter so attractive?
- Twitter has an active user base of over 300 million users and an annual revenue of about $2 billion. Even though it’s losing about US$ 125 million every quarter (although some attribute it to stock-based compensation), the potential acquisition candidate holds about US$ 3 billion in cash and short-term securities in hand, and an accumulated deficit of US$ 2 billion in its Balance Sheet.
- Twitter, which originally started out as a micro-blogging site, evolved into a social platform for discussing opinions, news and live events. Its video ads through data streaming are widely expected to be the primary source of revenue in the future. Recently, the company also inked deals with several companies for live-stream events on its platform, including 120 Sports, Bloomberg TV and the four major sports leagues in the U.S. In other words, it’s an attractive investment because of its data, user base and influence in politics, culture and the media.
- Verto Analytics conducted a survey in the US on 20,000 internet users and found that Twitter is the sixth largest digital publisher in the US from montly active users perspective, that reaches 89% of its audience in the nation.
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