The company's stock is down 78% from its all-time high. Active user growth has slowed to a crawl, and the company is forecasting annual revenue growth will continue slowing just as it has for the previous two quarters. Moreover, new executive departures occur each month like clockwork, and one of the biggest players in its space just got acquired at a huge premium.
Naturally contributing to the speculation: Twitter, for all its flaws and shortcomings, is still a pretty unique and valuable asset. As a real-time information source that immediately gives users a feel for what's going on in the world and how smart people (and not-so-smart people) are reacting to it, there's nothing quite like it.
In addition, for all of the success Facebook (FB - Get Report) has seen in getting celebrities, journalists, and media firms to engage with its core service, as well as with Instagram, Twitter remains indispensable for them. "After LinkedIn there just aren't a lot of properties left that are social, mobile, and cloud, and can be artificial intelligence," says Jim Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, which owns Twitter.
And -- though hardly alone on this count -- Twitter has made big strides as a video platform, driving huge growth in video views through its core video service, its 6-second Vine service, and its Periscope livestreaming service.
Just today, Twitter moved to strengthen its video presence by increasing the maximum length of standard video uploads to 140 seconds from 30 seconds, as well as by giving Vine users the option to include videos up to 140 seconds long, alongside a standard six-second clip.
The company also joined Facebook in creating an app specifically meant to help celebrities manage their accounts and see how fans are engaging with their material. And on Monday, Twitter announced a major acquisition of an AI start-up to improve its video content.
There's also growing sentiment that Twitter will have a better chance to reach its potential under new owners able to address the flaws in its interface and broader user experience that lead many users of Facebook, Instagram and Snapchat to walk away from Twitter after briefly trying it.
New owners might also be able to improve flagging ad execution, as brands choose to direct the lion's share of their social ad spend to Facebook and Instagram. Says Cramer: "Twitter can be so much more than it is but there is a remarkable failure of imagination and focus at the company... You simply can't look at Twitter the way it is. You have to look at it as if it were professionally run by a full-time CEO."
Of course, it take two to tango, and -- in the absence of activist pressure at least -- heavy M&A interest might not mean much if chairman/CEO Jack Dorsey is intent on keeping Twitter independent. As a recent column in Vanity Fair's The Hive illustrates, Dorsey's second run as Twitter CEO, which he's been doing while keeping the top job at Square, has been quite bumpy to date, but that fact doesn't seem to have dampened his enthusiasm for pursuing a go-it-alone turnaround strategy.
Looking at the list of potential suitors, Alphabet's (GOOGL - Get Report) Google easily stands out. The web giant has been linked to Twitter buyout rumors many times, and has already partnered with Twitter to include tweets within Google search results, as well as improve Twitter ad measurement for clients of Google's DoubleClick display ad platform.
Acquiring Twitter would both hand Google its biggest rival as a real-time information source -- it's worth recalling that Google has long said its goal is to "organize the world's information and make it universally accessible and useful" -- and give it the large-scale social media presence (and with it, social media data) it has long coveted.
Google could also migrate Twitter to its own cloud infrastructure, and deeply integrate Twitter with Google Now, Google News and YouTube.
Though Mark Zuckerberg once famously called Twitter a clown car that crashed into a gold mine, Facebook could doubtlessly find value in Twitter's continued strength as a social news platform, video hub and celebrity engagement and PR vehicle, particularly given that Facebook is trying hard to provide many of the same services.
But therein lies the rub: Regulators are bound to heavily scrutinize a deal that pairs the world's preeminent social media firm with an influential smaller rival.
The idea of Microsoft (MSFT - Get Report) buying Twitter can't be dismissed out of hand. Part of the company's motivation for acquiring LinkedIn (LNKD) is to create an intelligent news feed for professionals, pushed to them via Windows, that pairs LinkedIn's content with material Microsoft is able to cull from its apps and other sources.
Twitter's business-oriented content would be a natural fit for this feed -- particularly if Microsoft can leverage its AI investments to remove duplicate material and separate the wheat from the chaff. Twitter could also be integrated with the Cortana virtual assistant service.
On the other hand, Microsoft is bound to have its hands full in the near-term digesting LinkedIn. And with the $26.2-billion LinkedIn deal set to bring Microsoft's debt load to the $70-billion range, investors might balk at adding more debt to the company's balance sheet. Microsoft could also pay for Twitter with stock, but that would mean accepting the related dilution.
For its part, Apple (AAPL - Get Report) has indicated it's now considering larger acquisitions, and while the lion's share of its $233-billion cash balance is offshore, it would still have little trouble paying for Twitter, whose market cap now stands at around $11.4 billion.
But paying 11 figures for a social media platform whose success depends on actively supporting numerous other operating systems and Internet services would be pretty unusual for Apple, whose software and services investments have usually been made with the goal of driving hardware sales. This is, after all, a company that still isn't willing to have its mobile messaging service (iMessage) run on third-party hardware.
Facebook, Twitter, Alphabet and Twitter are all holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB, TWTR, GOOGL or TWTR? Learn more now.
Amazon (AMZN - Get Report) is a dark-horse candidate. Like Google, Amazon could migrate Twitter to its own cloud, and the company (in its own unique way) has turned into a formidable online media power. Its roughly $1-billion acquisition of game-streaming site Twitch could serve as a template for a Twitter deal.
However, Twitter would be much costlier than Twitch, and synergies with Amazon's e-commerce operations would be limited -- a 2014 deal to let Amazon users shop via Twitter created some buzz, but doesn't appear to have driven significant sales. Twitter also recently disbanded its commerce team after seeing limited usage for its social commerce offerings.
Cramer sees a number of potential buyers. "I just feel strongly that given the scarcity of properties and the changes being made and the ideas that are there to be had for someone else, whether it be a Google or an Apple or a Facebook or a Microsoft -- yes they have that kind of money -- or even an Oracle (ORCL - Get Report) if it really wants to go into cloud in a fast way."