Salesforce announced Friday it ruled away buying Twitter, leaving the social network without a clear offer. After several weeks of rumors about Salesforce being the front-runner to buy Twitter, the company said that Twitter wasn’t adequate enough for them. As a result, Twitter’s shares have dropped 7 percent.

Twitter has no apparent suitors now after Salesforce Chief Marc Benioff put an end to the rumors saying Twitter wasn’t the right choice for the San Francisco enterprise software company. As well, Google, Apple, and Disney have retired their bids for Twitter too. Now, the microblogging company faces a fall in its stock.

Salesforce announced Friday it ruled away buying Twitter. Photo credit: Digital Trends
Salesforce announced Friday it ruled away buying Twitter. Photo credit: Digital Trends

“You’re going to look at the price, you’re going to look at culture, you’re going to look at everything. … In this case, we’ve walked away. It wasn’t the right fit for us.” Said Benioff.

Salesforce decides to walk away

Salesforce is an American cloud computing company, which focuses on customer relationship management and commercial application of social networking. It is one of the main cloud companies with a market capitalization about $55 billion. The company was interested in acquiring LinkedIn; however, it lost it to Microsoft in June, when the last made a 26.2 billion dollars deal with the professional social network.

Therefore, it was rumored that Salesforce would be interested in buying Twitter to improve its cloud computing business using Twitter data, increasing thus its competitiveness next to Microsoft. The acquisition of Twitter was expected to cost around $20 billion.

Due to the rumors, Twitter’s stock gained value while Salesforce’s stocks went down, since acquiring Twitter would also mean it would have to deal with Twitter’s problems. Nevertheless, this Friday Salesforce has clarified the situation stating it is not interested in buying the microblogging company.

Bad News for Twitter

After Salesforce had ruled out Twitter bid, Twitter shares dropped to $16.88, while Salesforce stock went up 5.15 percent to close in $74.27. Kristin Binns, a Twitter spokeswomen, said the company wasn’t going to make comments about the Salesforce matter.

The truth is that Twitter has had growth issues. It has been operating at a loss which is worsened if it is compared to Facebook or Snapchat, networks that have shown better prospects lately. While Facebook has approximately 1.71 billion monthly active users, Twitter barely reaches 313 million monthly active users. This has put a lot of pressure on Twitter.

In an attempt to boost its growth, Twitter has brought back Jack Dorsey, a founding chief executive. Dorsey has tried to make Twitter a destination for instantaneous content launching the “moments” tab. However, little progress has been achieved. And now, after all, the possible buyers have retired their bids, Twitter finds itself it a terrible situation.

“If that is the case, then I think Twitter will likely have to remain independent until a more reasonable valuation is available,” James Cakmak, an analyst with Monness, Crespi, Hardt & Co.

Twitter and its employees’ moral leans a lot on the value of the company’ shares. But it Twitter doesn’t sell after all the latest rejection from large enterprises, its stock is likely to continue to drop, bringing despair to Twitter investors.

Source: Los Angeles Times