Talks about a buyout of Twitter Inc (NYSE:TWTR) have been refreshed with a report that private equity firm Silver Lake and investor Marc Andreessen once considered teaming up to buy it. Shares of Twitter surged by as much as 10% today as some investors gambled on the rumor, which seems—just as every other report about a buyout of the micro-blogging firm—to be just that.
Deal or no deal?
Business Insider (citing The Information) reports that Silver Lake and Andreessen had “considered some sort of deal.” The phrasing certainly doesn’t make it sound like a deal is in the works, and writer Jessica Lessin adds that she doesn’t know if “anything is active,” although she also said that one idea “being floated around in general” is a PIPE transaction. Such a deal involves private investors purchasing part of public equity through newly issued shares. Usually these transactions are done when companies need cash and public investors aren’t inclined to hand it over, which she doesn’t believe is Twitter’s problem.
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An unnamed source that’s close to Silver Lake reportedly “dismissed The Information’s report when speaking with the Financial Times.
Twitter buyout reports a dime a dozen
Indeed, hearing about a rumored buyout at Twitter isn’t anything new. Less than two weeks ago, we heard that News Corp was considering buying the company, although Rupert Murdoch later denied the rumor. We’ve also heard other murmurings over the last year or so, with names like Google being floated, but nothing has ever come of those rumors.
The mass exodus of high-level executives could heat up the takeover rumors even more as CEO Jack Dorsey faces more and more pressure to return results. Specifically, Wall Street wants to see user growth accelerate as Twitter shares have plunged by approximately 28% from the initial public offering price of $26. University of Michigan Professor Erik Gordon told Bloomberg that the micro-blogging firm is “easy prey for a takeover, and a go-private deal with Silver Lake could be its best bet.”