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Twitter Inc (TWTR) Debt Offering Could Help Facilitate Important Acquisition

Twitter Inc (NYSE:TWTR) may have some immediate, tangible goals for their recent debt offering that raised $1.5 billion in “cheap cash” for the social media company. With nearly $3.5 billion in cash on hand, the company could now seriously pursue a major acquisition to help augment their service and steer it towards profitability. As discussed by Josh Brown on CNBC today, one of those potential acquisitions for Twitter Inc (NYSE:TWTR) is Flipboard.


“They also might want to do a deal you know. They don’t need the cash. They finished last quarter with $2 billion, they only spent $100 million, they’re pretty close to cash flow positive, but, there are other companies out there that might fill a need. Flipboard’s been brought up a couple of times. Our friend Bob Peck (SunTrust Robinson Humphrey analyst) says it’s worth $800 million, it’s a doable deal at that level, and quite frankly, so many people see tweets, not on Twitter, and Twitter can’t benefit from the advertising revenue. Flipboard can help them change that, so it might be an interesting transaction” Brown said.

Coincidentally, Flipboard is one of those services that is actually stealing eyeballs from Twitter Inc (NYSE:TWTR) itself. The app allows users to access their social media feeds in a magazine-style format that they “flip” through the pages of. By purchasing Flipboard, Twitter Inc (NYSE:TWTR) could better integrate their own monetization methods into the service.

As Brown quoted of Peck, Flipboard was valued at $800 million during their last funding round, though that was a year ago, and Flipboard has since added tens of millions of users and doubled in “magazines”. Alternatively, Twitter Inc (NYSE:TWTR) could look to purchase companies in the e-commerce or ad tech spaces as ways to introduce new revenue streams into their main service.

While the overall assessment of Twitter Inc (NYSE:TWTR)’s perception as a company and stock remains mixed, the CNBC panel was largely positive concerning their debt offering and felt it could only help the company and would generate far more in returns that what they’ll end up paying back in interest.

Disclosure: none

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