Buyout Rumors: Analysts Dive in on Twitter Inc (TWTR) and Imperva Inc (IMPV)

Twitter Inc

Twitter Inc (NYSE:TWTR) shares soared nearly 20% today on the back of rumors that the social-media giant has initiated talks with several technology companies to explore selling itself. Those companies may include Google and Salesforce. Bloomberg reported that Twitter has hired Goldman Sachs to advise it on a sale.

Citigroup analyst Walter Pritchard commented, “While Twitter is involved in the customer service process, we don’t believe it is necessary for salesforce to own Twitter to be able to use it as a medium for customer service. Also, we don’t believe that if someone else bought Twitter, salesforce would be prevented from using Twitter as they do today. Our response, if CRM were to buy TWTR, would be negative. Twitter is profitable and while back of the envelope the deal might not be dilutive, we believe it would fuel concerns that CRM is de-focusing on for “customer” area in a quest to stretch for growth.”

According to, which measures analysts’ success rate based on how their calls perform, analyst Walter Pritchard has a yearly average return of 9.7% and a 64% success rate. Pritchard is ranked #287 out of 4189 analysts.

Out of the 42 analysts polled by TipRanks, 8 rate Twitter stock a Buy, 28 rate the stock a Hold and 6 recommend a Sell. With a downside potential of 20%, the stock’s consensus target price stands at $17.84.

Imperva Inc

On the heels of Bloomberg reporting that Imperva Inc (NYSE:IMPV) has garnered notable interest from five key buyers, JMP analyst Erik Suppiger believes “these rumors are likely true,” and reiterates an Outperform rating on IMPV, while raising the price target from $50 to $56, which represents a nearly 6% increase from where the shares last closed.

From the analyst’s perspective, “the prospect of a bidding war generating a premium valuation is a likely outcome,” with the stock already trading up 17% in the aftermarket following Bloomberg’s breaking news. As Suppiger sizes up the situation, Bloomberg’s report is trustworthy, as the suitors posted make logical sense, particularly in light of the fact the majority have acquired other options in the security market already.

Suppiger adds, “Notably, Cisco and IBM represent particularly attractive buyers as both companies are willing to pay a premium for security assets, with Cisco recently paying generous multiples for the acquisitions of Lancope and OpenDNS and IBM paying generous multiples for Trusteer, among others.”

“We raise our price target to account for an appreciation in valuation multiple across the security space and to reflect an increased likelihood of Imperva attracting multiple bidders in a sales process,” Suppiger concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Erik Suppiger is ranked #455 out of 4,189 analysts. Suppiger has a 62% success rate and gains 11.4% in his yearly returns. However, when recommending IMPV, Suppiger loses 1.7% in average profits on the stock.

TipRanks analytics demonstrate IMPV as a Buy. Based on 15 analysts polled in the last 3 months, 8 rate a Buy on IMPV, 6 maintain a Hold, while 1 issues a Sell. The consensus price target stands at $50.36, marking a 5% downside from where the stock is currently trading.


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