Twitter's (TWTR) - Get Twitter, Inc. Report life as an independent publicly-traded company has been nothing less than interesting. After a well-received initial public offering, it's been a bumpy journey worthy of more than 140 characters. Stalled user growth, management turmoil, an inability to convey its purpose and the uneven return of Jack Dorsey as CEO have kept the negative attention on the San Francisco-based company, which has led to weak investor sentiment.
That sentiment has changed in recent weeks, as speculation has mounted the company may sell itself, with nearly every major technology and media company being connected in some way.
A sale has come back into the spotlight as Chairman Ev Williams (who co-founded Twitter along with Dorsey) told Bloomberg in August the company has to consider its options. "We're in a strong position now, and as a board member we have to consider the right options," Williams said.
Since then, interest in the company has heightened markedly. The Wall Street Journal has reported bothSalesforce.com (CRM) - Get salesforce.com, inc. Report and Walt Disney (DIS) - Get Walt Disney Company Reportare weighing a bid for Twitter. Speculation about an offer from Salesforce increased after the company's chief evangelist, Vala Afshar, tweeted the merits of the company.
Afshar later tried to downplay the attention, following up with another tweet saying he simply loved Twitter, but that hasn't decreased conjecture about an eventual bid from Salesforce.
Disney -- which owns brands likes ESPN, Marvel, Pixar and LucasFilm -- may be interested in Twitter not only for its more than 300 million monthly active users and ability to communicate in real-time about sports events, but also for its recent efforts to move into live-streaming. Dorsey, who is already a member of Disney's board of directors, would likely stay on.
Other technology companies that have been mentioned as potential acquirers are Alphabet (GOOGL) - Get Alphabet Inc. Class A Report (GOOG) - Get Alphabet Inc. Class C Report , IBM (IBM) - Get International Business Machines Corporation Report , Microsoft (MSFT) - Get Microsoft Corporation Report and Facebook (FB) - Get Meta Platforms Inc. Class A Report . Media companies like Bloomberg LP and News Corp. (NWSA) - Get News Corporation Class A Report have also been mentioned.
Whatever company winds up owning Twitter, it seems increasingly likely that its life as an independent company is coming to an end. These three ETFs will help investors benefit if it is acquired.
Social Media Index ETF
Twitter accounts for 9.63% of the Social Media Index ETF (SOCL) - Get Global X Social Media ETF Report , according to ETFdb.com. This makes the ETF, which has a 0.65% expense ratio, heavily weighted toward any movement in Twitter shares, good or bad.
Despite thinking a merger between Disney and Twitter is not in the best interest of Disney shareholders, Nomura analyst Anthony DiClemente opines Disney may be attracted to Twitter's audience and could generate more revenue from the platform under its wings.
"As media viewership continues to shift to digital platforms, Twitter's younger, mobile-first audience - one which overindexes on sports enthusiasts - is large, scarce, and valued by ad buyers," DiClemente wrote in a note to clients. "In addition, Disney could possibly better monetize Twitter as a real-time events platform against its own core linear offerings by offering advertisers enhanced cross-platform marketing opportunities."
Sprott BUZZ Social Media Insights ETF
Sprott BUZZ Social Media Insights ETF (BUZ) also has Twitter as a significant portion of its portfolio, with the Dorsey-led company comprising 3.06% of the fund.
Barclays analyst Kanna Venkateshwar believes there may be value for Disney down the line, if it were to acquire Twitter, highlighting it as a different way to deliver content.
"We think the longer-term impact of the potential deal would depend on Disney's vision and execution success in defining new frameworks for content delivery, which is still in an evolutionary phase," Venkateshwar wrote to clients, while adding success is not a sure thing. "However, given Disney management's track record in integrating a diverse set of working cultures over the last few years across various acquisitions in studios, as well as its ability to define and execute on its highly successful franchise vision, we believe the company is one of the better positioned legacy media players to make a success of acquisitions like those of Twitter and BAMTech."
SPDR S&P Internet ETF
Though Twitter is only 2.65% of the SPDR S&P Internet ETF (XWEB) - Get SPDR S&P Internet ETF Report , investors get access to Twitter and other large internet companies on the cheap, with the fund sporting a 0.35% expense ratio.
Monness Crespi and Hardt analyst James Cakmak believes that a bid from Microsoft or Disney both make sense, with Disney needing it more.
"Disney needs to operate in a post cord-cutting world and needs distribution," Cakmak said in a research note. "The relationship is already incestuous with content deals between the two and Jack Dorsey's seat on Disney's board. We've long argued a media company doesn't make sense to acquire Twitter, but we see Disney uniquely positioned to be the exception and keep the platform at arm's length with the ability to forge content deals with competing publishers."