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Twitter (TWTR) Acquires Stake in SoundCloud for $70M
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As per a Re/Code report, micro blogging site Twitter, Inc. has bought a stake in music service company SoundCloud for $70 million. SoundCloud is an online music distribution platform.
Citing sources familiar with the matter, Re/Code added that Twitter is reportedly looking to invest $100 million in the Berlin-based music service company.
Both Twitter and SoundCloud later on confirmed the news but details of the deal weren’t divulged. The $70 million investment values SoundCloud at $700 million, implying no change from the 2014 levels.
Re/Code observed that though this raises questions about the company’s growth and reflects investors’ concerns, its partnership with Twitter could give its new subscription service a boost. As for Twitter, integration of SoundCloud could help add more users.
Twitter CEO Jack Dorsey said “Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators. They've been great partners of ours over the years and their community-supported approach mirrors ours in many ways.” Twitter had tried to buyout SoundCloud two years back but the deal didn’t materialize.
Rumors of Twitter being the next takeover target are doing the rounds, more so after LinkedIn was snapped by Microsoft Corp (MSFT - Free Report) for $26.2 billion, making it one of the expensive tech deals and the costliest for Microsoft, if approved by the regulatory authority.
Twitter troubles seem to be never ending. The micro blogging site is struggling to expand its user base beyond celebrities and journalists. Its once reliable ad business is also showing signs of a slowdown after Twitter said that “brand marketers did not increase spend as quickly as expected in the first quarter”. Plus, it remains a “no profit” organization. Executive departures continue unabated.
The poor performance has caused a bloodbath on the trading front with shares plunging as much as 56% in the past one year. With significant erosion in market cap and independent sustainability looking difficult, many analysts point out that Twitter might have to put up a sale sign board soon, if there isn’t any drastic improvement.
At present Twitter carries a Zacks Rank #3(Hold). A social media stock worth consideration is Facebook Inc. , sporting a Zacks Rank #1 (Strong Buy).
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Twitter (TWTR) Acquires Stake in SoundCloud for $70M
As per a Re/Code report, micro blogging site Twitter, Inc. has bought a stake in music service company SoundCloud for $70 million. SoundCloud is an online music distribution platform.
Citing sources familiar with the matter, Re/Code added that Twitter is reportedly looking to invest $100 million in the Berlin-based music service company.
Both Twitter and SoundCloud later on confirmed the news but details of the deal weren’t divulged. The $70 million investment values SoundCloud at $700 million, implying no change from the 2014 levels.
Re/Code observed that though this raises questions about the company’s growth and reflects investors’ concerns, its partnership with Twitter could give its new subscription service a boost. As for Twitter, integration of SoundCloud could help add more users.
Twitter CEO Jack Dorsey said “Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators. They've been great partners of ours over the years and their community-supported approach mirrors ours in many ways.” Twitter had tried to buyout SoundCloud two years back but the deal didn’t materialize.
Rumors of Twitter being the next takeover target are doing the rounds, more so after LinkedIn was snapped by Microsoft Corp (MSFT - Free Report) for $26.2 billion, making it one of the expensive tech deals and the costliest for Microsoft, if approved by the regulatory authority.
Twitter troubles seem to be never ending. The micro blogging site is struggling to expand its user base beyond celebrities and journalists. Its once reliable ad business is also showing signs of a slowdown after Twitter said that “brand marketers did not increase spend as quickly as expected in the first quarter”. Plus, it remains a “no profit” organization. Executive departures continue unabated.
The poor performance has caused a bloodbath on the trading front with shares plunging as much as 56% in the past one year. With significant erosion in market cap and independent sustainability looking difficult, many analysts point out that Twitter might have to put up a sale sign board soon, if there isn’t any drastic improvement.
TWITTER INC Price
TWITTER INC Price | TWITTER INC Quote
At present Twitter carries a Zacks Rank #3(Hold). A social media stock worth consideration is Facebook Inc. , sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>