Rupert Murdoch’s News Corp said rumors about the company’s interest in buying microblogging site Twitter or building a stake in it were untrue.
Twitter’s shares (TWTR), which rose as much as 14% on Wednesday, pared some gains and closed up 4.1% at $17.38.
The stock rose from a record low after unconfirmed chatter about News Corp’s interest in Twitter circulated on Wednesday. The rumors intensified after a CNBC segment, tech website Re/code said.
The social media site was evaluated as a takeover target because of the company’s shrinking stock price, Re/code said.
In the few months since co-founder Jack Dorsey returned as the chief executive, Twitter has been trying to make the site more engaging. The company said in December it was testing a feature to show ads to people who read tweets without logging in as it tries to monetize non-active users.
“Twitter inside a larger organization definitely makes theoretical sense, whether its another internet company or a media company,” Monness, Crespi, Hardt, & Co analyst James Cakmak said.
A News Corp (NWS)spokesman said there was no truth to the rumors.
Twitter already has several high-profile investors. Former Microsoft CEO Steve Ballmer reported a 4% stake in October, making him the third-biggest shareholder after Twitter co-founder Evan Williams and Saudi billionaire Prince Alwaleed bin Talal.
Twitter has been the subject of takeover rumors in the past, including a fake report attributed to Bloomberg that claimed the company had received an offer to be acquired for $31 billion.
Twitter had received bids from Alphabet’s Google (GOOG) and Facebook (FB), according to reports.
Twitter trades at 28.12 times forward earnings, below its peer median of 36.06. Facebook has a PE of 33.08, while LinkedIn’s is 52.64, according to Thomson Reuters data.
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“Even though News Corp denied the rumors, I do think this could help investors potentially see some valuations for the stock,” Cakmak added.
Up to Tuesday’s close, the stock had fallen nearly 41% since Dorsey was named permanent CEO in October.