Steve Ballmer Buys 4% Stake In Twitter: Boon Or Bane ?


Steve Ballmer, the former CEO of Microsoft Corporation (NASDAQ: MSFT) and the owner of Clippers basketball team has bought 4% stake of the microblogging network Twitter Inc. (NYSE:TWTR). Ballmer tweeted about this from his newly created Twitter account @Steven_Ballmer. The tweet, however, led to suspicion owing to the uncertainty of the account, however later Twitter verified his new account by inserting a blue check next to his name.

Soon after the announcement, the Twitter’s stock soared by nearly 5%. The tweet from Steve Ballmer exalted the new initiative of Twitter called “Moments.” The “Moments,” a new feature of Twitter curates the best tweets of the day.

With this move, Steve Ballmer emerged as the third biggest individual shareholder in Twitter. His stock is valued little more than $800 million in the company worth $21 billion. After Evan Williams, Co-founder of Twitter, and Saudi Prince Alwaleed bin Talal, it is the tech billionaire Ballmer who has out his weight behind the company. Steve Ballmer also is the largest single shareholder in Microsoft with 4% stake.

For the last few quarters, Twitter has been struggling with declining revenue despite recording growth in its user base. Probably for a short duration but Ballmer’s move has strengthened the company’s position in the share market.

Is Steve Ballmer Adding Value To Twitter?

Despite the steady growth in its active user base, Twitter is, apparently, in hot waters. Tech pundits claim Twitter is yet to find the revenue mechanism to gain the market confidence. In such scenario what Ballmer gains out of the deal, is questionable. as of now the only possibility of Ballmer making a modest return from his investment is the rumored acquisition possibilities of Twitter by Google.

When we have a glimpse of Ballmer’s earlier initiatives as Microsoft CEO for a decade, we learn that he ventured into a couple of not profitable investments. One such move is the acquisition of Yammer by Microsoft for $1.2 billion in 2012. Yammer is known as a social networking tool for businesses. Alternatively, it is simply the Facebook of Businesses. The industry analysts consider this move as misstep as Yammer was valued at $600 million then. It was Steve Ballmer, however, who pushed this deal to the management of Microsoft.

The history of Steve Ballmer with respect to business ventures do not remain impressive and trust building. However, his new move with the microblogging site may be out of his personal interest. Steve Ballmer never anticipated the reach of iPhone, after the first iPhone’s launch as he laughed at Apple Inc. (NASDAQ:AAPL). His net worth clocks $23 billion, big enough to make a lot of investments.

Despite all odds with Ballmer, it is the investor’s discretion to go ahead with Steve Ballmer to endorse Twitter, having 316 Million monthly active users. In the wake of technology billionaire’s endorsement, can the investors as well users expect enhanced experience from Twitter is yet to be answered.

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