Technology

After Huge LinkedIn Deal, Are These 5 Companies Acquisition Targets Now?

Lee Jackson

Published: June 14, 2016 10:40 am

Last Updated: January 13, 2020 6:49 am

Every once in a while, there is a Wall Street deal that really makes people stand up and take notice, and the Microsoft Inc. (NASDAQ: MSFT) all-cash bid for LinkedIn Corp. (NYSE: LNKD) is just that kind of a deal. A huge all cash bid with a massive 50% premium gets the merger and acquisitions juices flowing, and it also gets people to start looking for the next candidate.

In a research brief, Axiom Capital says that the need to be all things internet can help to drive further deals in the industry. Five companies are noted as possible candidates, and Axiom is not the only firm on the street that has highlighted some of these companies in the past as takeover targets.

eBay

This top internet company has long been rumored to be in play. eBay Inc. (NASDAQ: EBAY) operates e-commerce platforms that connect various buyers and sellers worldwide. Its platforms enable sellers to organize and offer inventory for sale, and buyers to find and buy it virtually anytime and anywhere.

The company’s Marketplace platforms include its online marketplace at ebay.com and the eBay mobile apps, as well as StubHub platforms that comprise its online ticket platform at stubhub.com and the StubHub mobile apps, which enable fans to purchase tickets to the games, concerts and theater shows. Its Classifieds platforms include a collection of brands, such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Classifieds and others that offer online classifieds and help people find whatever they are looking for in their local communities.

The Thomson/First Call consensus price target is posted at $28.01. Shares closed Monday at $23.89.

Pandora Media

This company is facing ever more competition, but it continues to hold its own. Pandora Media Inc. (NYSE: P) provides internet music streaming services in North America. The company allows its listeners to create personalized stations to access free music and comedy catalogs, as well as personalized playlist generating system, and it offers Pandora One, a paid subscription service to listeners. It also sells audio, display and video advertising to advertisers for delivery on computer, mobile and other connected device platforms.

While Pandora clearly is not the only company with a big desire to be in the music streaming business, it is the current leader in installation and use in the automotive world, with a penetration rate right at 70%, and it hopes to stay that way.

The consensus price target is $13.91, and the stock closed most recently at $11.23 a share.
PayPal

This company was spun-off from eBay last year and many on Wall Street think the real growth is in the payment sector. PayPal Holdings Inc. (NASDAQ: PYPL) operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide.

PayPal enables businesses of various sizes to accept payments from merchant websites, mobile devices and applications, as well as at offline retail locations through a range of payment solutions across company’s payments platform, including PayPal, PayPal Credit, Venmo and Braintree products. Its platform allows customers to pay and get paid, withdraw funds to their bank accounts and hold balances in their PayPal accounts in various currencies.

The consensus price target is posted at $44.06. The stock closed most recently at $36.54.

Twitter

The stock was hammered again after reporting earnings and user numbers that came in below expectations. Twitter Inc. (NYSE: TWTR) is either a total value tech buy or caught in a death spiral, depending on who you ask on Wall Street. High multiple valuations and overall terrible negative market sentiment has trampled the stock and made it a favorite target of short sellers.

Twitter offers various products and services, including Twitter, which allows users to create, distribute, and discover content; and Periscope and Vine, a mobile application that enables user to broadcast and watch video live. It also provides promoted products and services, such as promoted tweets, promoted accounts and promoted trends that enable its advertisers to promote their brands, products and services, and subscription access to its data feed for data partners

The consensus price target for the stock is $18.38, and the shares closed Monday at $14.55, up big on the LinkedIn deal.

XO Group

This is a more under-the-radar company that may be a takeover target. XO Group Inc. (NASDAQ: XOXO) provides consumer multiplatform media services to the wedding, pregnancy and parenting and nesting markets. It operates a network of websites under various brands, such as The Knot, that offers wedding resources through wedding website and mobile apps, national and local wedding magazines and nationally published books; The Bump, a pregnancy and parenting brand that provides personalized information, content and tools for anyone at any stage of their journey from fertility to pregnancy and parenting through the toddler years; and The Nest, which focuses on young nesters setting up homes and navigating new lives together.

The consensus price target is posted at $21.25. The shares closed Monday at $16.94.

Now obviously there is no guarantee any of these get bought. However, they all have tangible assets that a larger entity with deep pockets may be able to exploit. Either way, whether it is one of these five or other companies, there will be more deals done.