Twitter shares jumped by as much as 3% during regular trading hours today after a rumor that Carl Icahn will be buying into the company surfaced. The source of that rumor is a post by Doug Kass on The Street. He makes some very specific predictions about Carl Icahn and Twitter.

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Carl Icahn to go long on Twitter?

Kass listed 15 events he thinks will surprise Wall Street this year. One of those predictions involves Icahn and Twitter, as he predicts Icahn will disclose a very precise stake of 9.9% in the micro-blogging platform. He suggested that the activist investor will call Twitter his “new Netflix.”

Carl Icahn Icahn Enterprises
Carl Icahn image via FBN

He believes Icahn’s disclosed position will spark a bidding war for Twitter between Facebook and Google. In the end though, he thinks Google will win out and end up forking over $60 per share for Twitter. If Kass is correct, that would mean the search giant would end up paying approximately $40 billion for the micro-blogging platform.

Will Google drop some of its cash on Twitter?

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Kass also predicted that Google will finally start doing something with all of the cash on its balance sheet, and this is a sentiment others have expressed as well. Share repurchases seem very likely, as shareholders seem to be becoming impatient waiting for returns, particularly since the company keeps diluting their investment.

Seeking Alpha contributor Bill Maurer also suggests Google might want to use some of its cash for acquisitions. He suggests the search giant could buy Twitter “with a large chunk of stock” and then announce share buybacks a few months later to offset the share dilution.

Is either prediction likely?

Google buying Twitter seems pretty unlikely. While it can and should be argued that Twitter would give its fledging social network Google+ a boost, Google probably wouldn’t drop $40 billion on an acquisition. A price that high would make Twitter the search giant’s priciest acquisition by far.

The next closest one would be Motorola Mobility, which Google paid $12.5 billion for in August 2011, at least as far as we know, according to a Wikipedia entry on the topic. Of course the greatest majority of Google’s acquisitions don’t come with a disclosed price tag.

So what about Kass’ other prediction? Will Carl Icahn take a significant stake in Twitter? This one could go either way, really. Twitter management has been bailing on their company’s stock for quite some time. And while shares remain significantly lower than where they spiked not long after the micro-blogging platform’s initial public offering, it seems unlikely that Icahn would take an interest in Twitter, at least for right now. But hey, anything’s possible. He did take an interest in high-priced Netflix, after all.

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