It may not seem like it but your favorite microblogging network, Twitter Inc (NYSE:TWTR) is in deep financial trouble. The popular social media platform recently sought a buyout deal with a major tech company but the plan fell apart. The debacle caused Twitter’s shares to plummet 20%, closing to a disappointing $19.87. The nosedive caused the stock to give back most of its gains above $25, a level reached from news of a buyout last week.
It was rumored that Alphabet Inc. was in talks to acquire the social media app but last week, Recode confirmed that Google’s (NASDAQ:GOOG) parent company would no longer pursue the deal. No reason was specified for backing out of the deal.
Although there are a handful of potential bidders, interest for Twitter has been waning as of late. Even more bad news, there’s no real guarantee that interested buyers would actually strike a deal with the struggling company. In fact, it was reported that a board meeting between a bidder and Twitter execs was canceled just last week.
The microblogging platform, which is the social media of choice among celebrities and popular personalities alike, just celebrated its 10th anniversary. Other major companies that are tagged as potential buyers – such as Apple and Disney – are now unlikely to strike a deal with the social media site.
According to analysts, Twitter is valued at $17 billion, and the company who gets to acquire it is likely to pay a premium for the firm.
With the lack of bidders, it looks like Twitter execs have no choice but to focus on its newest app, live video. Live video debuted last month and made news following a deal with major sporting companies, particularly the NFL. Through the live video streaming, sports fans can now watch games in real time. It is free to use and won’t require signing up to a Twitter account.
Twitter’s newest live streaming app was a runaway hit among fans. Due to a stagnant user growth, the social network has been depending heavily on its live video feature to spark interest and promote user engagement. But despite having 300 million users, Twitter’s growth has stalled for several quarters. Furthermore, the return of cofounder Jack Dorsey last year hasn’t helped much either.
Of course, all is not lost for Twitter. Based on reports, the company remains in talks with cloud computing group salesforce.com, inc. (NYSE:CRM) for a possible buyout. But not everyone at Salesforce.com are keen on buying Twitter.
Last week Salesforce investors reportedly voiced their displeasure over a potential agreement with the struggling social media platform. When asked for a comment on the issue, a Salesforce spokesperson said the company “doesn’t comment on rumors.”
After a failed agreement with Google, Twitter will start accepting new bids this week.