Twitter has been enjoying a measure of quite of late after a series of turmoils that left the social networking giant, shaken. Well, turns out that it was only the quiet before a storm as the company braces itself for decisions following a meeting of its board this Thursday.
Yup. And sources tell us that it won’t be a casual, cordial meeting with loads of snacks amd sweets either. The topics to be served before the board may be as hot as the company’s future prospects as a standalone company and even acquisition.
While there are a whole bunch of companies that have exhibited interest in buying out the company, none of them have gone as far as to make a serious offer — at least in public — leaving the company hanging. Rumors have been pointing towards Google, Apple and Rupert Murdoch — who has various gargantuan organizations capable of acquiring twitter — as possible acquisition makers. Meanwhile, there are also reports that point to private equity firms as likely candidates for the acquisition.
It’s highly unlikely that a company of Twitter’s magnitude and audience hasn’t received more than a few serious acquisition offers. However, it appears that it hasn’t found any of them to its liking yet. There are reports that state that any bidder who comes knocking at Twitter’s doors, may find itself paying somewhere around $18 Billion — not exactly a pleasant prospect when you are taking up a company with the kind of issues Twitter does at present.
With executives jumping ship and a steady stream of money leaking out of the company’s coffers each quarter though, Twitter desperately needs some succor. It has tried various alternative methods to cut costs in the past — such as layoffs, including a massive one last year that saw it let go of around 8 percent of its employees — however, that doesn’t really appear to be significantly helping the company.
Nevertheless, it may resort to further layoffs to gain some respite, and indeed, the meeting of the board may take that into account as well. However, layoffs and similar measures will provide a temporary respite at best unless there is a drastic shift in Twitter’s strategy that manages to turn things about, the question of Twitter’s future as a standalone company is very likely to pop up yet again.
That said though, layoffs are still an all too likely prospect. The company had almost 4,000 employees near June end and even leaving aside the salary required to sustain these numbers, paid out almost $168 million in stock-based compensation last quarter alone. Which is terrible, considering that it equaled roughly 28 percent of its quarterly revenue.
So yes, layoffs are certainly on the horizon. Specially, if they can make the company look more appetizing to a potential buyer. However, that does not mean that acquisition is an absolute certainty. No company wants to lose its status as a standalone entity and Twitter won’t be an exception. In all likelihood, an external investor or VC firm may decide to take a hand and attempt to improve the company’s prospects, or an existing investor may decide to bump up his stakes in order to gain greater control.
Well, we will have greater details after this Thursday. One thing is for sure though, if Twitter does not want to go the way of the Yahoo, the Thursday’s board meeting really needs to come up with something that can save the company.