Twitter Tries to Tackle a TikTok Tie-Up
All camera eyes are on Twitter.
It was reported last week that Twitter (ticker: TWTR) was in talks to acquire TikTok’s U.S. operations—a move that appeared baffling at first blush. Twitter has a market cap of $30 billion, roughly equal to what potential rival bidder Microsoft (MSFT) could pay for TikTok
But underlying that skepticism about Twitter pursuing an acquisition was the idea that the social-media company—while popular—lags behind peers such as Snap (SNAP) and Facebook (FB), which also owns Instagram. Twitter, which reached an agreement
Jack Dorsey Stays Twitter CEO After Company Reaches Agreement With Elliott Management
Just one week after it emerged that activist hedge fund Elliott Management was looking to oust Twitter’s controversial chief executive, the two parties reached an agreement.
Continue reading with activist investor Elliott Management earlier this year, is surely facing pressure to improve profitability and broaden its reach.
Snatching up TikTok could certainly be one way to do so. It would capture the short-form video platform’s 100 million U.S. users, and give Twitter a chance to capitalize on lessons it learned with the demise of Vine, Twitter’s short-form video-hosting service that it shuttered in 2016. The question of financing becomes somewhat less onerous considering that Twitter has investors such at Elliott and private-equity giant Silver Lake.
Another idea, floated by Baird analyst Colin Sebastian, would see Microsoft creating a “digital media trifecta” by buying TikTok and Twitter and doing more with its Bing search engine. With its $136 billion cash position, Microsoft could certainly afford both.
But even if deals don’t happen, Twitter knows it’s under pressure.
Luckily, a contentious election cycle and the eventual return of live events should see Twitter capture eyeballs and thumbs, if not hearts and minds.