Skip to Content

Twitter’s Final Buyout Price Might Be Lower Than You Think

With an increasing number of rumored suitors for Twitter, analysts who follow the company started to offer estimates for a possible purchase price.

For any long suffering Twitter shareholders, they aren’t offering much solace. Twitter went public at $26 a share in 2013 and hit a high of $73 in less than two months. Even after falling from that peak, the stock price was still over $50 as recently as April 2015.

But before this week’s spate of takeover rumors, Twitter’s share price had dropped below $20, closing last Thursday at $18.63. The rumors that companies including Salesforce (CRM), Google’s Alphabet (GOOG), and Walt Disney (DIS) might be interested in bidding have drive the price up to $23.37 at Monday’s close.

Several analysts said bidders might go slightly higher, calling for a $27 target price, but nowhere near the stock’s prior highs. Pivotal Research analyst Brian Wieser said the purchase of Twitter by a huge media or tech company would make it cheaper for the social and communications network to expand.

“As the prospect of an acquisition of Twitter seems increasingly likely we are reducing the cost of capital embedded in our model to a point that is closer to many of its potential acquirers vs. what was previously embedded in our model, leading to a new $27 price target,” he wrote in a report.

Robert Peck, an analyst at SunTrust (STI) Robinson Humphrey, came to the same $27 or less conclusion after considering the value at which Microsoft (MSFT) bought LinkedIn. At $26 a share, Twitter would be valued at just slightly more than LinkedIn at 6.1 times its projected sales—or 22 times its earnings before interest, taxes, depreciation and amortization for next year, Peck noted. And a typical 40% takeover premium to Twitter’s average closing price over $30 prior to the rumors emerging would suggest a buy out at $27, he wrote.

Get Data Sheet, Fortune’s technology newsletter.

Some analysts see even less upside for Twitter (TWTR) than that. James Cakmak, an analyst at Monness, Crespi, Hardt & Co., was unwilling to predict a bid would be much higher than even the current price.

“With respect to valuation, it’s difficult to make a case materially higher given the stagnant growth in users and revenue, as well as inferior ad tech and measurement capabilities relative to peers,” he wrote. “A bidding war, however, could certainly push fundamentals aside as there is still a plethora of data to build content distribution layered with an interest graph.”

Disney is the most likely buyer, he added, because the two companies would fit together best. Microsoft and Salesforce are next most likely, with Google “near the bottom” due to regulatory hurdles. ” We recognize it makes the most academic sense, but the antitrust hurdles may be too high to overcome, in our opinion,” he wrote.

The current round of takeover rumors started on Friday, after several media outlets reported that Twitter had received “expressions of interest” from Google, Salesforce.com, and other companies. On Monday, Disney was reported to be interested as well.

CEO Jack Dorsey finds himself in this position after his efforts to broaden Twitter’s appeal and reignite user growth have largely failed to take off. Most recently, advertiser interest has started to wane. In the second quarter, revenue grew less than analysts expected, and the company offered guidance for the next quarter that was far short of projections.