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Twitter stock surges 5% on rumored takeover bid

On Tuesday, Twitter Inc’s shares jumped around 5% and
activity in its options surged on unsubstantiated market chatter about the
company fending off a takeover bid.

On Tuesday, Twitter Inc’s shares jumped around 5% and
activity in its options surged on unsubstantiated market chatter about the
company fending off a takeover bid.

According to an Economic
Times
report, the micro-blogging service provider’s shares rose to $53.28,
the highest they have been since October, owing to the market chatter that the
company has hired advisers, reportedly including Goldman Sachs, to rebuff a
takeover bid. 

In marked contrast to the stock’s fall
last year, there is an unusual amount of interest this year in Twitter’s stock.

According to Trade Alert data, Twitter’s options were
unusually active on Tuesday with total volume more than 250,000 contracts, or
twice the average daily volume.

Call options, usually used to place bullish bets on
shares, outnumbered puts by a ratio of nearly 3 to 1. The reading is about the
highest it has been in favor of calls since the beginning of March.

Calls
betting on the shares rising above $53 by Friday were among the most active
options on Twitter with volume of nearly 11,000 contracts.

On Tuesday, more than $1.5 billion was added to the value of Twitter following
reports Google could launch a bid for the social network.

According to the Telegraph, two companies are believed to have contacted
Twitter with “serious” interest, with Google identified as one of those firms.

While Google launched its own social network, Google+, in 2011, it has
struggled against rivals such as Twitter and Facebook. According to the Telegraph,
buying Twitter could jumpstart Google’s social network ambitions. 

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