Twitter shares have tumbled after reports of several of the biggest firms' interest in snapping up the stalled social network have cooled.
Twitter shares rocketed yesterday after reports bids will be submitted as soon as this week, but the stock tumbled as much as 16 per cent in morning trading in New York following fresh reports two major potential buyers with deep pockets - Google and Disney - were no longer interested.
That would leave Salesforce as the biggest front-runner publicly connected to a potential deal, though investors didn't seem keen, with stock tumbling as much as seven per cent on Wednesday.
Salesforce boss Marc Benioff stayed tight-lipped on the matter in an interview with CNBC yesterday evening.
"It's a great product. It's an exciting product, but obviously the business has a lot of challenges, very severe challenges," he said. He has previously said he considers many potential deals but passes "on most".
Twitter is said to be seeking a deal before its next earnings report on 27 October, when it is likely to show the pace of user growth is still stuck in neutral, despite chief executive Jack Dorsey's efforts to push the firm into live video content. However, that may be too little, too late for the once-innovative company to attract more attention against rivals such as Snapchat and the Facebook behemoth.
While takeover speculation mounts and pushes up Twitter's share price, that could make a deal more difficult to reach. Twitter will be seeking as high a price as possible, but potential acquirers are unlikely to be willing to pay much of a premium (if any) for a company with no user growth.
Shares in Twitter touched a 2016 high of $25.25 yesterday, and have rocketed 48 per cent over the last three months, but are still well off all-time highs of $73.31, and remain below its $26 IPO price.
Edison analyst Richard Windsor said a buyer is more likely to come from outside the tech sector.
Before the reports of Disney ditching a bid, he said: "To make a success of Twitter the buyer has to find a way to combine Twitter with its existing business to enable... user numbers and revenue to begin growing again.
"This will be much harder than it sounds and we suspect that those who are more familiar with this industry are likely to have a look and then decline to bid. Hence, if Twitter is to be sold, it is likely to go to a newcomer in this space such as a broadcaster or perhaps Disney if it can work out why it would need this asset."