Twitter’s share price TWTR continues to drift lower — it recently closed below $25, down almost 65% from the peak it hit after its initial offering in 2013 — but the company still doesn’t have a permanent CEO, more than two months after the departure of former chief executive Dick Costolo. That, combined with the slowing growth in its user base, makes it more or less inevitable that Twitter will be acquired, according to mergers and acquisitions specialist Victor Basta.

Basta is managing director of Magister Advisors, a boutique investment firm with offices in London and Silicon Valley. In a research note this week, the firm said that Twitter is a logical acquisition candidate for someone like Google GOOG or Facebook (I argued in an earlier post that Google’s de-emphasizing of its own social network, Google+, makes it even more likely that the company will eventually acquire Twitter, although others seem to disagree).

Twitter would be worth more to a larger business that can accelerate innovation at the company than it is as a public entity, says Basta. “Market expectation was that Twitter, having created a completely differentiated platform, would accelerate innovation and introduce products and features that would justify a $60+ share price,” he said. “Disappointingly, innovation for users has largely stagnated. Furthermore, user acquisition numbers have slowed and many sign up and don’t activate.”


The company has made progress in its efforts to monetize the platform, said Basta, thanks to acquisitions such as the mobile ad-network company MoPub. But the service still lacks features, and that is driving down the value of the platform compared to others such as Facebook FB .

“Twitter still has an opportunity to be a successful standalone business, but to date it has squandered that opportunity. The business has made around fifty acquisitions since 2008 but the user experience has remained largely unchanged since launch,” Basta said. “The business is still essentially an overwhelming firehose of crowdsourced data. Without a better way of sifting data or sorting and compiling a user’s own posts the platform will almost certainly find that its user base begins to run out of steam.”