Twitter gained a lot of media attention lately with talk of selling the company. However, all recent attempts have flopped. You may find the recent Twitter buyout flops as peculiar. After all, everyone uses Twitter. Shouldn’t the well-known microblogging social media company find it easy to make a deal? Forbes contributor, Peter Cohen, identified in a recent article some of the main reasons for these flops. Not just losing money and experiencing a slow-down in subscribers, Twitter fights the prevailing perception that they harbor a toxic environment. This “toxic brand” label contributes to its apparent inability to entice a large buyout.
Twitter Buyout Flops: The Result of Underperformance
Recent news reports that Twitter continues to lose money and reduce its staff. Additionally, Twitter stock has declined as the company struggles to keep their investors. As of Friday, their stock price settled at $18.09, giving them a market capitalization of $12.67 billion. This indicates they have lost more than 28 percent since October 5 (Investopedia). Clearly the company has struggled to maintain momentum since their start in 2006. Their reported initial offering of $25 billion has enticed few companies. They have been approached by Google, Apple, Salesforce, Disney and other companies, each never taking the final step of signing the check. Few companies want to pay an oversized price for a struggling social media company.
Twitter Buyout Flops: The Result of “Toxic Brand” Perception
Twitter has been recognized as a haven for hate speech and cyber-bullying. In addition, Disney reportedly backed out of buying Twitter because they didn’t want to be associated with anti-Semitic tweets. The company made attempts to alleviate the problem, adding a feature that allows users to block keywords they find offensive. The toxic environment of Twitter continues, however. Even after changing CEOs multiple times, the underlying issues have not been resolved. With numerous suitors backing out of the deal, Twitter needs to take a closer look at the hate speech they allow. It may play a bigger role in how they sell the business than they think (more information).
As rumors continue to surge about potential buyers of Twitter, we watch in anticipation. Most recently, the Japanese company SoftBank has surfaced in the rumor mill. Time will tell if this will go the way of the rest of the Twitter buyout flops.