Rupert Murdoch's News Corp said rumours about the company's interest in buying microblogging site Twitter or building a stake in it were untrue.
Twitter's shares, which rose as much as 14% at some stage yesterday, pared some gains and closed up 4.1% at $17.38 last night.
The stock rose from a record low after unconfirmed chatter about News Corp's interest in Twitter circulated yesterday.
The rumours 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 monetise non-active users.
Twitter already has several high-profile investors. Former Microsoft 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.
The company has been the subject of takeover rumours in the past.