Last year, it looked like Facebook was going to snap up Twitter but a $500-million deal suddenly went pear-shaped (Personally, I think it was the best thing that ever happened to Twitter given Facebook would have neutered it.)
According to Facebook investor and venture capitalist Peter Thiel, the deal failed to materialized because Facebook wanted to pay using Facebook stock. Unfortunately, the two sides couldn’t agree on how much Facebook shares were worth.
“It became pretty clear it wasn’t going to happen,” he told BusinessWeek. “The deal would have to be done with Facebook stock. And then you have to figure out how much the stock is worth.”
At one time not so long ago, Facebook was estimated to be worth $15-billion after Microsoft purchased a small stake for $240-million. At the time of the Facebook-Twitter negotiations, Facebook was probably worth $5-billion to $10-billion. And now with global economy in ruins and stock markets eroding, Facebook could easily be worth $1-billion to $2-billion.
Meanwhile, Twitter raised $35-million recently based on a valuation of about $250-million.
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Why the Twitter-Facebook Deal Crumbled Apart
Last year, it looked like Facebook was going to snap up Twitter but a $500-million deal suddenly went pear-shaped (Personally, I think it was the best thing that ever happened to Twitter given Facebook would have neutered it.)
According to Facebook investor and venture capitalist Peter Thiel, the deal failed to materialized because Facebook wanted to pay using Facebook stock. Unfortunately, the two sides couldn’t agree on how much Facebook shares were worth.
“It became pretty clear it wasn’t going to happen,” he told BusinessWeek. “The deal would have to be done with Facebook stock. And then you have to figure out how much the stock is worth.”
At one time not so long ago, Facebook was estimated to be worth $15-billion after Microsoft purchased a small stake for $240-million. At the time of the Facebook-Twitter negotiations, Facebook was probably worth $5-billion to $10-billion. And now with global economy in ruins and stock markets eroding, Facebook could easily be worth $1-billion to $2-billion.
Meanwhile, Twitter raised $35-million recently based on a valuation of about $250-million.
Fun and games with numbers, fun and games!