According to a report from Bloomberg, Disney is currently working with a financial adviser to evaluate a possible bid. Reports surfaced last week that Twitter was in talks with a number of different companies about a takeover. Among the interested companies were Salesforce, Google, Microsoft, and Verizon.
It may seem odd to think of Disney wanting to own a social media network. But remember, Disney is a media conglomerate. The company will always be looking to expand into new arenas. As popular as they are, Disney’s theme parks and resorts only make up 20 percent of the company’s profit. In addition to the obvious Disney properties, they also own ABC, ESPN, A&E, and other channels. Disney also owns 30 percent of Hulu and has a 10 percent stake in Vice Media.
Reaching Viewers Who Don’t Have Cable
One reason Disney might be so interested in Twitter is video streaming. Twitter’s rival, Facebook, has spent much of the last year beefing up and promoting its own video streaming services. It could be a way for Disney to reach the 20-million households that are considered “cord-cutters.”
Twitter has been experimenting with video streaming for a while now, too. When the new NFL season began a few weeks ago, an agreement with Twitter took effect. All of the league’s Thursday night football games are now live-streamed on Twitter, as well. The 2016 presidential debates are also being live-streaming on Twitter.
James Cakmak, an analyst at Monness Crespi Hardt & Co., says video streaming is exactly what Disney is after. “It’s a video distribution play. What Disney has to think about is what is its place in a post cord-cutting world. They are investing in technology for distribution — and this would give them the platform to reach audiences around the world.”
Shares of Twitter have been soaring every since the buyout news last week. The Disney rumors have sent the stock up even further. The potential price tag if Disney were to acquire Twitter is speculated to fall between $18 and $30 billion.
A History of Acquisitions
Disney’s current CEO, Bob Iger, has led the company on a number of high-profile acquisitions. In 2006, Disney made their partnership with Pixar permanent. The House of Mouse purchased the animation studio for $7.4 billion. Then in 2009, Disney purchased Marvel Comics. That lucrative deal cost the studio $4 billion. In 2012, Iger led the company as they purchased Lucasfilm. That deal gave Disney ownership of both the Star Wars and Indiana Jones franchises. It was a deal worth another $4 billion.
Setting Investors “A-Twitter”
Twitter was launched in 2006 by by Jack Dorsey, Evan Williams, Biz Stone, and Noah Glass. Dorsey now sits on the Board of Directors at Disney, making the acquisition even more likely. The company had its initial public offering (IPO) in 2013 and then began trading on the New York Stock Exchange (NYSE).
What do you think? Would you be excited by a Disney/Twitter partnership?