The tech industry was filled with rumors to start the week, with Netflix (NFLX) and Twitter (TWTR) at the center of it all. Both companies are rumored to be potential acquisitions, which sent both stocks soaring.
1. Twitter
Twitter has been the source of takeover rumors for months. The social media giant has been trying to revive its user base. Many investors view a takeover as a way to breathe life into the company.
Between Friday’s close and Monday’s close, the company’s stock soared 4%. In early-morning trade on Tuesday, Twitter’s stock is down 2.13%.
Salesforce (CRM) has been linked to a potential buyout of the company.
Twitter’s stock struggled on Tuesday due to the company’s uncertain future and questions from Salesforce shareholders.
Salesforce also announced the acquisition of Krux, a company that deals with marketing data. The deal is valued at $700 million, with $340 million to be paid in cash.
Alphabet (GOOGL) is also reportedly eyeing Twitter. Google, a subsidiary of Alphabet, is reported to have hired a financial advisor to evaluate a bid for Twitter. The companies have worked together in the past, and Twitter would help Google move further into social media with a strong user base.
2. Netflix
The streaming video company has been tied to a potential buyout deal from Walt Disney (DIS). The rumors sent the company’s stock up over 4% on Monday as a result. The company is slated to release their most recent quarterly results in the coming weeks.
Disney shareholders are weary of the deal and question why the company would buy Netflix.
An acquisition from Disney would potentially open up the entire Disney catalog to Netflix users and greatly reduce overhead as a result.
Analysts suggest that the rumors may be overstated. Netflix is said to be a very expensive company to run. Netflix’s user growth has been on the rise in recent quarters, and profit margins are on the rise, which is a strong point for the company. Weak operating cash flow and poor return on equity is a concern for investors.
