×

Monness analyst: Twitter operating independently 'just doesn't make sense'

If Twitter is looking to sell, it needs to readjust its pricing expectations, according to James Cakmak, an analyst from Monness, Crespi, Hardt & Co.

Cakmak told CNBC's "Power Lunch" on Thursday that "Twitter has two options: One is either go private or two, operate out of a bigger corporation. Because at the scale it's going right now, operating independently just doesn't make sense."

Investors had been closely following the bidding war for the social platforming company after Twitter announced its intentions to field bids last month, but Cakmak claims that Twitter needs to settle on a more reasonable price if it wants to be bought.

"What we've been seeing is a reported bidding war that has been driving up the price. But the financial fundamentals is mismatched with the fundamentals of the business," Cakmak said. "You're not just buying a social network, you're buying a data set. So I think it can make sense at the right price. [The bids] should lie more in the $10-15 billion dollar range versus the $20 billion we see right now."

After Recode released a story on Thursday reporting that three major companies (Alphabet's Google, Disney and Apple) would not be placing bids for Twitter, the social networking service saw its shares plunge more than 20 percent, leading investors wondering about any other offers left on the table.

One potential bidder is Marc Benioff's Salesforce.com, a cloud computing firm. However, Calmak maintains that the acquisition would be incompatible.

"You can make the arguments for the marketing cloud and the CRM [customer relationship management], But can they even afford to pay for it?" Calmak said. "I just don't see it happening, because they'll have to piss off a lot of shareholders there. They just don't have the balance sheet to pay for it."

When asked about any other suitable fits for Twitter, Cakmak suggested that Microsoft could potentially be a good fit, claiming "Microsoft can leverage Twitter with LinkedIn, and with Cortana on the AI [artificial intelligence] side in order to give a personalized hub of information for users both personally and the business world, professionally."

Cakmak also emphasized the major selling point and worth of Twitter isn't about its social media users, but the data set they represent.

"What you're buying is the interest graph of all the users on the platform," Cakmak said. "I think Twitter is the only company right now able to be acquired to buy this kind of data."