September 27, 2016

Could Disney buy Twitter in major deal?

The popular social platform could soon belong to the Walt Disney Co., according to some rumors.

While there's been no concrete action yet, Walt Disney Co. may be considering buying Twitter. According to Bloomberg, the sale could give the company another addition to its media assets, and is part of other recent rumors concerning a possible Twitter buyout. Despite this, there are no official statements on the matter from the heads of either Disney or Twitter.

Monness Crespi Hardt & Co. Analyst James Cakmak told the site that Twitter's main appeal to the media giant would be its video distribution service potential.

"What Disney has to think about is what is its place in a post cord-cutting world," he said. "They are investing in technology for distribution — and this would give them the platform to reach audiences around the world."

The article alone seems to have had a financial impact. MarketWatch noted that Twitter's shares increased after the idea started circulating, as it did days earlier when CNBC reported on possible business mergers in Twitter's future, a different MarketWatch article said.

Despite all of this, there are numerous arguments against the deal. The Los Angeles Times collected some of the analyst criticism regarding Disney's potential purchase. The source noted that Twitter would represent a break from most of Disney's purchases, which usually include "intellectual property" it can capitalize on through its existing media outlets.

Although it could give Disney added online presence, it may also break from the company's image and tendency toward control, given the massive unpredictability of the sharing platform, the source added. 

A Forbes article said that Twitter's stock shares were worth $22 on Friday, Sept. 23, the day the rumors of the buyout started gathering momentum. Other rumored companies who may purchase Twitter include Salesforce or possibly Google. Forbes said that equity analyst Scott Kessler, among others, supports the latter possibility.