Forum Moderators: goodroi
Rumours that Google is looking to buy Twitter propelled the social network’s stock price to a 4% rise on Tuesday, but this isn’t the first time it’s happened. Rumour: Google Eyes Twitter Acquisition [theguardian.com]
For Google to buy Twitter now it would have to pay a healthy premium over and above the current market value, which would put it in the region of $50bn. Google has a sizeable cash stockpile of over $60bn, but it’s not in the same league as Apple’s $178bn and is less than Microsoft’s $90bn. As with most other US technology companies, some of that stockpile is situated outside of America in European, Asian and other countries in which it operates.
Buying Twitter would require Google to repatriate a chunk of that cash and therefore pay tax on it, which would eat into its maximum cash buying power. But Google isn’t limited to just buying with cash.
Those are the two key reasons these rumors keep surfacing, and why activist investors are watching Twitter closely for any opportunity to attack. There is no question the company is indeed vulnerable and, despite a solid financial showing in Q1, Costolo seems destined to be a permanent fixture on the investor hot seat. Get Used to More Twitter Takeover Rumors [recode.net]
Access to real-time thoughts, I'm sure Google would love that kind of data.
