While Twitter's leaders have long maintained that they want it to remain independent, the idea of a sale became more plausible after recent comments from co-founder and board member Evan Williams, who had also been the company's CEO before being replaced by Dick Costolo in 2010. (Costolo was later replaced by co-founder Jack Dorsey, who had previously been replaced by Williams).
If it sounds like a soap opera, Williams upped the ante. Speaking to Bloomberg last week, he said that Twitter needs to "consider the right options" when it comes to its future as an independent company. While the comment would seem benign from most board members, it didn't stop Twitter stock from jumping almost six percent on his remarks.
But finding a buyer won't be easy, given the Twitter's estimated cost. Using the same multiple LinkedIn got from Microsoft in its recent $26 billion acquisition deal, a Twitter buyer would have to fork over about $18 billion. That's a steep price tag for a company that has had persistent issues with growth and also one that is still losing money each quarter.
Twitter is trying to improve its performance, and exploring numerous ways to cut costs, according to sources. One option, of course, would be yet another round of layoffs, similar to the 8 percent staff reduction it made last October. Some employees are worried about this, multiple sources said.
But such cuts might be inevitable. Twitter is considered to be too bloated still — it had 3,860 employees as of June 30 and paid out $168 million in stock-based compensation last quarter alone, an amount equal to roughly 28 percent of its quarterly revenue. (Facebook's stock-based compensation was just 12.5 percent of its Q2 revenue, in comparison.)
Those close to the company have long believed that another round of layoffs would make sense, and could make Twitter more appealing to a potential buyer.
The company will also consider what to do with certain parts of its business that don't directly impact its bottom line and the stock price. That could include units like MoPub or Vine or Fabric. Trimming these teams or even selling off these smaller businesses would make Twitter leaner and more focused, and ultimately, more appealing to a possible suitor.
There are other possibilities besides a sale, though, like a noisy activist making a big stock purchase to start manipulating things from the outside. It was rumored in early August that current investors Steve Ballmer, the former Microsoft CEO who owns the Los Angeles Clippers, and Saudi Prince Alwaleed Bin Talal might make a run at buying larger stakes in the company. That hasn't happened yet, but the duo already owns a combined 9 percent of Twitter. More likely is a hedge fund activist stirring the pot and making public complaints about the company, which could focus on still-thorny issues such as Dorsey's second CEO job at Square.
Which brings us back to Thursday and Twitter's board meeting. Whatever the company decides to do should probably happen quickly. It's been more than a year since Dorsey first took over as interim CEO for Costolo, and Twitter has failed to generate any kind of positive momentum since.
While there are a number of promising product initiatives, such as its live video efforts, they have been routinely overshadowed by Twitter's pernicious issues around safety and tools to combat abuse.
The recent attack on "Saturday Night Live" star Leslie Jones is just the latest in a string of eruptions that has plagued the service. Twitter's anonymous nature means that its abuse issues are in some ways baked into the product itself — if you have an internet platform that allows open commenting from anonymous users, abuse is sure to follow. It's a problem that both Facebook and Snapchat don't have thanks to their structure.
Add that to the Twitter board's growing list of issues.