The entertainment giant Disney seems to be showing some interest in acquiring Twitter shares. It would not be the first company to court Twitter, but Disney’s bid would be unique, since it’s the only media company that has shown interest in Twitter shares.
It’s plain to see why companies operating in the same area would want to acquire the hugely successful social network. Both Microsoft Corp. and Google Inc. are potential bidders. But Disney’s interest Twitter makes perfect sense as well. The media company certainly would have the means to acquire Twitter if they chose to do so. Right now, Twitter has an estimated worth of $20 billion, so about as much as Disney makes in 3 months.
Acquiring Twitter with a be a very bold move on Disney’s part. Expanding their digital outreach is certainly something the company must consider. More and more people are leaving behind cable TV and DVDs and are gravitating towards online streaming channels. Little by little, Disney-owned companies, which include ABC and ESPN, are starting to invest more in the digital world, and secure their future in this new medium.
If Disney would end up acquiring a sizeable chunk of Twitter shares, they would have an immensely valuable media distribution tool at their disposal. And in recent years, Disney has been expanding at an unprecedented rate. Its most well-known recent acquisition was LucasFilm. The company was formerly owned by Geroge Lucas, creator of the Star Wars franchise.
However, analysts find it hard to believe such a deal would go through. Laura Martin, who monitors Disney for Needham & Co. argued that traditional shareholders would probably not support such a transaction.
Its’ Unlikely Disney Will Invest in Twitter Shares
The two companies could not be more different when it comes to their approach and basic principles on which they operate. Disney is infamous for its very controlling nature. When it comes to the actual creative output, many creatives are disgruntled. Even though it seems the company has made quite a lot of good business decisions.
On the other hand, many see Twitter as a champion of free speech. In recent years, its acted like a sort of real-time news outlet. Everyone and anyone with an opinion can voice it on this platform. Revolutions have started via Twitter, governments have been overthrown, and censorship has been eschewed.
In fact, it’s lack of control over user generated content might be partly why it’s unlikely Disney will try to acquire a large amount of Twitter shares. The social network’s commitment to freedom of speech has also made it incredibly difficult to censor racist or abusive tweets. If Disney would go ahead and attach its name to the social media platform, it would not go well its squeaky-clean reputation.
Plus, while the investment might not be very large for a company such as Disney, they’d still have to pay a large sum of money for just one asset. Recently, Disney acquired the animation studio Pixar, LucasFilm and the Avengers franchise, all for around $15 billion. The deals are already proving to be worth the investment. And their combined costs are less than that of Twitter.
And while the media platform continues to be as popular as ever, it’s not the cash cow it may seem to be. Twitter has been losing money, and it the second fiscal quarter of 2016 it lost about $107 million.
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