Jim Cramer -- Twitter Buyout Appears Less Likely This Year
The S&P 500 may be hitting a new high butshares of Twitter (TWTR) - Get Report are slumping 2.5% Monday following a downgrade to neutral from buy by noteworthy analyst Bob Peck of SunTrust.
Peck assigned an $18 price target on the stock and reasoned that the company's latest initiatives haven't helped accelerate user growth. He also said a buyout of the company is "highly unlikely" this year.
The buyout rumors have been what's pushed the stock higher, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment. Twitter is an AAP holding.
After LinkedIn (LNKD) agreed to be acquired by Microsoft (MSFT) - Get Report , Twitter became one of the last properties left to be acquired in the group. Cramer pointed out Microsoft shares didn't fall after the deal, so that could bode well for any company considering acquiring Twitter.
Although he's a bit more upbeat on Twitter's M&A prospects than Peck, Cramer acknowledged selling the company isn't likely a top priority with CEO Jack Dorsey in his first year back at the company and with many new board members at the helm. They want to turn the company around, he said.
One day it could be takeover target, but so far, Twitter just hasn't delivered, Cramer concluded.
At the time of publication, Cramer's Action Alerts PLUS had a long position in TWTR.