Twitter’s 2018 Q4 earnings on Thursday beat expectations on revenue ($908.8 million) and profit (31 cents per share) but the company said it expects higher expenses in 2019, which led the stock lower. Twitter shares are still up 4% in 2019 so far, and about flat over the past 12 months.
Twitter also said its monthly active user count (MAUs) fell to 321 million and that it will no longer break out MAUs, and instead focus on daily active users (DAUs) as a way to show strong, monetizable engagement by existing users.
Despite these shorter-term concerns, at least one prominent media analyst thinks Twitter is an attractive target.
“I think Twitter should be acquired right now,” says Rich Greenfield of BTIG. “This is a company that reaches well over 100 million people every single day, a product that a lot of the users see as indispensable... Think about what NBC and Comcast care about: they want to be relevant on mobile, they want content, they care about sports and news and information... Disney shouldn’t be buying more content than Fox, they should be buying Twitter and owning the sports conversation on mobile devices all around the world.”
There was talk of Disney eyeing Twitter back in 2017 when Twitter had a slew of disappointing quarters and stalling user growth and was reportedly on the auction block. Salesforce was one of the big companies that kicked the tires. And in October 2017, Disney CEO Bob Iger confirmed that Disney looked at buying Twitter, but instead bought BAM Tech, the streaming video arm spun out of Major League Baseball Advanced Media. Disney is now the majority owner of BAM Tech, and the video company powers ESPN+ and will power Disney+.
But even if Disney thought it moved on from Twitter in 2017, it may want to look again. Greenfield makes a compelling case; I argued the same thing last year.
“If you’re a media company and you want distribution to consumers on mobile devices, Twitter is the only company you can buy,” Greenfield says. “Snapchat is controlled by Evan Spiegel, he’s not selling; Facebook is too big and is controlled by Mark Zuckerberg. Show me a company on mobile that gives you distribution that you can buy that is actually at a scale and size that is digestible. Yes, it's not the size of Facebook or Instagram... but Twitter has had massive growth over the last few years.”
Indeed, Twitter’s user base has grown by more than 30% in the past three years, a time when Twitter, Greenfield says, was “left for dead” by many.
Owning Twitter would also give Disney a place to distribute bits and bites of its incredible franchises from Disney Animation, Pixar, Marvel, and Lucasfilm. It already has experimented with short films released right to Twitter, like the 8-minute Pixar short “Purl” that it dropped this week. Disney’s acquisition of Fox means even more new movie franchises to promote, so a Twitter buy makes even more sense.
Of course, that doesn’t mean it will happen. Skeptics say that with all of Twitter’s harassment issues and trolls, the family-friendly Mouse House could never bring it into the Disney family.
Twitter has a market cap of $22 billion. Disney has a market cap of $126 billion and $4.5 billion in cash on hand; it could also finance a Twitter acquisition with debt or stock.
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Daniel Roberts is a senior writer at Yahoo Finance and closely covers digital media. Follow him on Twitter at @readDanwrite.
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