There have been speculations and rumors that BlackBerry and Twitter could both be acquisition targets, but just how likely is it that either or both could be bought out one day? Certainly both companies have seen their valuations plummet, although for very different reasons, but that doesn’t mean any other company would be interested in acquiring them.

BlackBerry Ltd A Buyout Target? More Likely Than Twitter Inc

BlackBerry a “dud”?

In a post on MarketWatch, Jeff Reeves argues that BlackBerry is a more likely acquisition target than Twitter. He states that every day someone asks him whether he thinks Twitter will be acquired, perhaps by Google (or now its parent company Alphabet Holdings), Microsoft, Facebook or another company.

But even though he sees Twitter in a more positive light in terms of what it offers, he thinks BlackBerry which he calls “that dud,” as being the more likely target of the two—but only for those who are “interested in throwing money at battered tech companies on the hope of a big buyout pop.”

Why Twitter may not be targeted

Even though Twitter’s valuation has come down significantly, it still is quite high, Reeves notes. After all, the micro-blogging platform has yet to post a GAAP profit, and its recent earnings reports suggest that we can’t expect a GAAP profit anytime soon. Twitter’s biggest problem isn’t that user growth has stalled, as most investors seem to think.

The company’s biggest issue that its costs are rising faster than its sales, as revenue rose 71% compared to last year while cost of revenue increased 68% year over year. And when you add the revenue miss into the picture, things just don’t look good.

What about user growth?

He does address the user growth issue at Twitter, noting that in many cases, the users are worth more than whether or not a social network turns a profit. But Reeves argues that users aren’t what valuations rest upon, using Facebook’s recent acquisitions as a reference.

For example, Facebook paid $1 billion for Instagram in 2012. At that time, it had 30 million units, and Twitter currently has about 316 million users. So if using similar math, that would value Twitter at about $10.5 billion, he says, although the micro-blogging platform’s valuation is at around $18 billion.

He also notes that Facebook bought WhatsApp last year for approximately $19 billion, and the messaging app had about 450 million users. With 70% of the number of users, Twitter would get a valuation of approximately $13.3 billion. Further, he said both WhatsApp and Instagram were growing quickly when they were acquired, which Twitter definitely can’t claim.

He states that Facebook bought WhatsApp and Instagram expecting them to be worth a lot more in the future—a bet that has certainly played out. Twitter’s valuation, on the other hand, doesn’t appear to be heading in an upward direction. He thinks Twitter might only be worth $12 billion next year.

As of this writing, shares of Twitter were up 4.81% at $28.13 per share.

Why BlackBerry could be a bargain

BlackBerry, on the other hand, he said looks like a bargain, although he is still skeptical of a buyout in this case as well, noting all the rumors and speculations which have been swirling for years. Indeed, it seems as if the Canadian company has hit rock bottom, which would make it a better target because it would seem as if its valuation could go nowhere but up.

After all, BlackBerry is sitting on about $3.3 billion in cash and investments, which is approximately 87% of its market cap. Also the company recorded over $800 million in operating quarter for its February quarter. Both figures suggest BlackBerry could be around for quite some time despite the slow death of its smartphone business.

And then there are the other things BlackBerry has to offer which are worth something. If management was open to selling off the company in pieces, they probably could, as some companies would be interested in its wireless patents, while others might want BlackBerry Messenger, QNX, or BlackBerry Enterprise Service.

As of this writing, shares of BlackBerry were up 1.86% at $7.51 per share at the NASDAQ.