I wonder why Citi is hating so much? Isn’t Twitter chic and in style with the hipsters, persons who might like to view ESPN content on the app, or perhaps share Mickey Mouse pictures with their friends and strangers who ‘follow’ them?
Apparently, Citi doesn’t give a shit about that stuff and thinks Disney will suffer a 10% drawdown, should they be stupid enough to buy the money losing Twitter.
They makes the case here.
Via Bloomberg
If you enjoy the content at iBankCoin, please follow us on Twitter1. Trouble with internet M&A
Previous mergers and acquisitions in the internet space examined by Citi yielded few media marriages that turned out well. “In the last 15 years, we cannot think of a single web-based property that was successfully acquired by a traditional media firm.” Specific instances listed include AOL Inc. and Time Warner Inc., as well as MySpace Inc. and News Corp.2. Twitter has its challenges
This has been a story for quite some time, and is the reason shares of Twitter have been declining for a number of months. Unfortunately, Citi doesn’t see these trends turning more positive anytime soon. From troubling user growth to management turnover, Twitter is under increasing scrutiny.3. Yesterday won’t be the first decline for Disney’s stock
Citi ran the numbers on two scenarios: Disney buys Twitter all in cash or it buys Twitter all in stock. Either way, Citi believes shares of Disney would see declines as a results of the deal, with drops of $5 or $9, respectively. That represents a fall of nearly 10 percent in the worst case scenario.4. Disney can’t do much to help Twitter
Lastly, Citi didn’t see many ways for Disney to solve Twitter’s problems. The team said that they believe Twitter and Yahoo! both lost money on the deal to stream NFL games online, which leads them to believe even more content on the social media platform won’t necessarily benefit the company financially.“If history is any guide, Twitter entails significant risks for the buyer,” they conclude.
Citicrap has been ordered by their large clients and hedge funds to downgrade the bird so they can get in at better prices before the inevitable takeout or higher prices in any case.
but, TWTR has same market cap as DB..
Maybe Citi is worried because 80% of Twitter traffic seems to be from/about Trump. Too dependent on a single source?
Or maybe along with the rest of the establishment this is part of Citi’s effort to silence his Movement?