Have you been following what’s happening with the Twitter world the last two weeks? If not here is a quick summary. There were rumors about possible bids for Twitter and over the course of next one week this propelled the stock to +40%. And then last week once again there was news in the wind that the bidding wars stopped, and the rocket ship came crashing down (it dropped ~28% in the last 1 week).
Ups and down over 2 digit percentages in such a short span is something I expected to see with only penny stocks. So this was kind of exciting to follow where it was leading to. Well what’s more interesting is the companies which were rumored to be part of the bidding wars (Google, Disney and Salesforce) had their stock affected negatively while the bidding was happening. I remember someone calling this ‘The Twitter Tax’. Salesforce which was foremost of the bidders had its stock drop by ~8%. That is steep.
The talk around bidding stopped last week and since Salesforce and Twitter stocks reversed course. Salesforce has been up ~7% today, while Twitter is down by 14%. Ever hear about the ‘hot potato’ story? Everyone who holds it gets burned. Kind of reminds you of that, don’t you think?
All this recent movement in the stock was mostly based on M&A acquisitions. So I think it would be very interesting to see what would happen on Oct 27th when Twitter would be reporting its 3rd quarter earnings. All eyes on it; the TWTR dance. Man, that must be a heck lot of pressure on Jack Dorsey.