Twitter is a stock that has lost money for anyone who bought in at the first day IPO price and still owns it. Its gone up, down, back up, then down again, up once more, and is now down below its opening price. It is getting clear that this is NOT a high growth stock like it was once viewed.
Now that CEO Dick Costolo is gone and replaced with original CEO Jack Dorsey, investors are really starting to wonder if anyone can come in and move this company forward. Twitter has a unique platform that is ingrained right along Facebook in all our consciousnesses. Whenever you see a Facebook logo, chances are that the Twitter logo will be right beside it.
Yet for all the name recognition Twitter has, it has still not been able to grow into a force big enough to make money and drive the stock price up. While Facebook is part of the vast majority of people’s lives, Twitter seems to appeal to a select few and the rest just don’t get it or see a need for it.
At this point, there is lots of talk about TWTR possibly being acquired by Facebook, Apple, or Google. It does seem like this is the most likely scenario as nothing the company does on its own seems to move it forward. Twitter is like half a company, not big enough to stand on its own and yet it still could clearly be an asset to one of the big three. It has a lot of value that might be tapped into and developed by a bigger company but on its own, Twitter seems to have ground to a halt.
If you want to buy TWTR stock, you must realize that you are taking on a great deal of risk. Even if the company is bought out, there is no guarantee it will be at a price much higher than you bought it for. And buying a stock just hoping and waiting for a buyout is one of the riskiest moves you can make. The stock may plummet further before any such negotiations take place and you might be stuck with a loser if it never happens.
There are a lot of egos involved whenever a startup like Twitter fails to produce the hoped for home run and those egos could get in the way of any proposed buyout. The higher-ups may want to prolong things much longer than they should just to prove Twitter can make it on its own. That is what I see as a potential obstacle if you buy the stock hoping for a buyout from a larger company with big pockets