These conversations come down to two primary things.
First, integration. How can the buyer seamlessly work the company it acquires into its ecosystem? If you're buying a solid brand -- Twitter and Pandora certainly qualify (in that order) -- it only makes sense to want to preserve its identity.Second, and closely related . . . Can the buyer not only maintain, but guarantee the acquired company's autonomy? I would think -- and hope -- these things would matter to the takeover target. I think -- and hope -- they do at Pandora and Twitter. I really don't think getting bought out is just a natural step in the progression at either company. With that said, any buyout would have to address those two points favorably. It's tricky. You need to integrate, but, with companies such as Twitter and Pandora, you should not do so at the expense of the long-term trajectories they're charting. In Pandora's case, I can't see a way Google or Amazon.com (AMZN), for that matter, could swallow Pandora whole, yet not break the company's stride. That doesn't mean there isn't a way; however, aside from complete and total autonomy, nothing sticks out as obvious. Google could treat Pandora like it did YouTube. But, that assumes quite a bit, particularly that the search and advertising giant would throw its support behind Pandora's very different sales model and invest in it accordingly. When looking at any M&A rumor you have to ask several questions to separate inane speculation from something with a legitimate chance of happening. Who needs the buyout and why? Does a buyout benefit both parties equally? Or is this a lopsided relationship where one company operates from a position of weakness? And I am not speaking relatively. Of course, comparatively, Apple dwarfs Twitter, but in their spaces, both companies are quite healthy. Neither needs to seek M&A on the buyout or sellout side.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV