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Don't Fall for Twitter Takeover Chatter

Like the rest of the world -- possibly including Twitter's own board members -- we have no idea if Twitter will stay an independent company. Speculation about a sale has circulated forever, and has never panned out. Yet. But one thing is abundantly clear: Twitter's stock direction is tightly linked to takeover rumors.

So far this year, Twitter's stock price has jumped 4.8 percent or more once every six trading days on average, or 24 out of 169 market sessions. And half of those stock pops are likely related to rumors, reports, hopes and dreams that Twitter might be acquired or could become the target of activist shareholders, according to a Bloomberg Gadfly analysis. These were mostly thin threads of takeover speculation, but that's all that is keeping Twitter's market value afloat these days.

Our analysis is imperfect. Sometimes it's hard to pin down exactly why a stock price goes up or down on any given day. But we can probably all agree that it's simply nuts for a company with a $14 billion market value to be roiled by takeover chatter as often as Twitter is.

Twitter deserves some of our collective pity for this roller coaster ride. The company's market value soared as high as $42 billion after it went public nearly three years ago. The hope was Twitter might grow as big as Facebook some day. As the number of Twitter users stalls and more recently as the company's advertising revenue growth cools off, it's now clear that won't happen. It might still be a great company...


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