Salesforce Abandons Twitter Bid (Report)
Salesforce is not going to acquire Twitter, after all: The cloud business services company has nixed plans to bid for Twitter, according to a Financial Times report. The paper quotes Salesforce CEO Marc Benioff saying that Twitter was not the right fit for his company. “We’ve walked away,” said Benioff.
Salesforce was among a number of possible suitors ever since news broke last month that Twitter’s board was considering to sell the company. Other names floated in the media included Disney and Google, but both companies have since signaled that they’re not interested in an acquisition.
This left Salesforce as the last possible candidate known to the public, and reports suggested that Benioff was personally making the case for an acquisition. However, he faced significant headwinds from Salesforce investors, including large funds like Fidelity, which holds 14 percent of his company.
Salesforce was looking at a possible acquisition of Twitter after it lost a bidding war for Linkedin against Microsoft, which acquired the career-focused social networking site for $26 billion in June.
The news of Salesforce not making a move is bad news for Twitter investors who had hoped to make a quick buck on the sale of the company: Twitter shares had gained some 47 percent since news of a possible acquisition first broke in September. Much of that gain already evaporated over the last week as an acquisition started to look increasingly unlikely.
Twitter stock took another nosedive Friday on the news, falling close to 7 percent, with shares trading as low as $16.44, only to recover slightly soon after.
With Salesforce out of the picture, Twitter is likely going to abandon its exploration of a sale. This could be a boon to CEO Jack Dorsey, who had reportedly pushed to stay independent. But it also raises expectations for the company’s performance. Twitter has been putting a huge emphasis on live video, striking deals with the NFL and others to carry live streams of high-profile events. Investors will look for any signals that this strategy is working when the company reports its Q3 earnings at the end of the month.
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