Wall Street thinks that Twitter selling itself is 'inevitable' - but not this year


Jack Dorsey Sun Valley

Getty / Drew Angerer

Twitter CEO Jack Dorsey


Wall Street thinks Twitter will need to sell itself, but that it won't happen this year.

"We think that if current user trends continue, M&A is inevitable for Twitter," SunTrust analyst Robert Peck wrote in a note to investors Monday. "However, given the CEO's <1 yr tenure and a newly constituted board, we think an acquisition of Twitter in 2016 is highly unlikely."

Twitter has struggled with user growth and engagement, sending the stock on a downward spiral during the past year.

However, Jack Dorsey only regained the CEO spot last October, and the company just appointed Facebook's former CTO, Bret Taylor, to join its board.


So, who could acquire Twitter? Google, Comcast, and News Corp have all been floated.

That's in line with Peck's thinking.

"Logical potential acquirers include: larger media/data companies like Google, Facebook, Apple, as well as media and telco companies," he writes. "Further, with intensifying competition we believe the company could feel compelled to utilize its $2B net cash to accelerate innovation."

Peck did not provide a specific post-2016 target date for when he thought Twitter might get acquired, though he noted that a deal might require an activist investor to initiate the action.

Peck cut his rating on Twitter from "Buy" to "Neutral," noting that many of Twitter's new efforts to boost its business have not materialized, and the stock was down 2% when markets closed on Monday.


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