The stock price of Twitter Inc (NYSE:TWTR) fluctuated—declining to a 52-week low of $15.48 per share then climbing to as much $19.04 per share and eventually closed $17.39 a share, up by more than 4% on Wednesday.
The shares of the microblogging shoot up due to speculations that News Corp (NASDAQ:NWS) (NASDAQ:NWSA), the media conglomerate controlled by Rupert Murdoch was interested in acquiring a stake in Twitter.
Jim Kennedy, a spokesman for News Corp denied the speculation. He told Re/code, “The rumor’s untrue.” Following his statement, Twitter shed some of its earlier gains today.
There were previous speculations that Google was interested to acquire the microblogging company. Facebook Inc (NASDAQ:FB) CEO Mark Zuckerberg was rumored that he engaged in discussions with Twitter co-founders Ev Williams and Biz Stone in 2008.
Twitter should merge with a larger media company to survive
Some people on Wall Street believe that an acquisition by a larger media company could help Twitter achieve a long-term growth.
Matthew Tuttle, CEO of Tuttle Tactical Management, said, “At this point the best chance Twitter has to survive in the long term is to join forces with a larger (preferably media) outlet. If not, they have a very long and bumpy road ahead of them.”
Mr. Tuttle also commented, “Dorsey is wearing many hats and has to be very careful to stay focused on his core competency.” Mr. Dorsey is also the CEO of Square, the mobile payment services company that went public in November.
Twitter trading below IPO price
Twitter lost more than 53% of stock value over the past year. Investors seemed losing confidence with the ability of its CEO Jack Dorsey to drive the company toward long-term growth and profitability. Over the past month alone, company lost more than 24% of stock value.
Furthermore, Mr. Tuttle noted, Twitter is now “below its IPO price, and virtually everyone who has bought the stock since the IPO has lost money.” He added that the company has “many structural problems and must do something significant to encourage investors to buy the stock.”
Eric Jackson, managing director of SpringOwl Asset Management, told the New York Times, “There was too much hype and too much hope that once Jack was hired; he would suddenly wave the magic wand and user numbers would somehow go up right away.”
However, Mr. Dorsey emphasized during the company’s earning call in October that they need to do a lot of work to make it easier for people to use its service. He emphasized that it would some time for them to make all the necessary changes to boost the Twitter’s user base, which is a major factor for the company’s success.