Twitter (TWTR) rallied 15% on the week last week as the social media giant benefitted from the surprise LinkedIn (LNKD) sale to Microsoft (MSFT) for $26.2 billion in cash. Twitter has been struggling to maintain users and boost user growth as people flock to Facebook (FB), LinkedIn, Instagram and other social media channels.
The sale of LinkedIn is the main factor behind Twitter’s stock rising as investors mull over the potential sale of Twitter.
A Twitter sale isn’t being proposed as of recent reports, but many analysts suggest that other tech giants may pursue a buyout in an attempt to keep up with Microsoft’s purchase of LinkedIn.
Twitter Invests $70 Million in SoundCloud
Rumors last week that Twitter invested in SoundCloud were also verified. The company confirmed that they invested $70 million in the music-streaming company. Years back, Twitter wanted to buy the company, but the buyout never came to fruition.
The $70 million investment is part of a $100 million round of funding for SoundCloud.
Twitter owns a stake in SoundCloud now, but Jack Dorsey, CEO of Twitter, has not confirmed the details behind the investment. SoundCloud is valued at $700 million, according to recent estimates, which should give Twitter at least a 10% stake in the company.
The investment may also be a strategic partnership for Twitter to boost user growth, which has remained largely sluggish over the past few quarters.
SoundCloud may also benefit from the partnership in an attempt to promote its new subscription service. The company’s subscription service is vital to the company’s future as debt levels at SoundCloud continue to mount.
In February, rumors swirled that SoundCloud may be forced to close their doors after posting a $44 million loss.
Recent funding from Twitter will help the company stay afloat and avoid closure.
Twitter Expands Video Play Length
Twitter has made headlines this week with the announcement that it spent $150 million on a machine learning company. The immediate difference in the company’s core service will be felt by other news this week.
The company announced today that they’ll be expanding its video service to allow 140-secound videos, up from 30-second videos.
Video is a major driver in the world of social media, and Twitter is further trying to entice creators to flock to the company’s video platform by launching a mobile app for video creators. The shift from 140-character tweets to 140-second videos will allow the company to serve a larger audience, something that is largely needed as growth remains stagnant.
The company purchased Magic Pony on Monday, a startup from London. The acquisition will allow Twitter to better understand the features of imagery. The team will join Twitter with a focus on expanding Twitter’s live and video platform, according to Jack Dorsey.
Twitter is expected to post $646.49 million in revenue for the quarter ending in June, with EPS increasing from $0.07 to $0.10.
Twitter stock is down over 50% in the last 12-month period, and the possibilities that Magic Pony can help the company better compete with Facebook makes Twitter even more attractive to potential buyers.