The acquisition discussions between Facebook and Twitter have Fail-Whaled some three weeks back, according to BoomTown. The discussion was going on for several weeks and the folks at Facebook were really serious to acquire twitter for $500 million in Facebook stock. Now that is where the problem lies, Facebook was valuing its stock at $15 billion due to the Microsoft investment in Facebook last October. Furthermore Facebook’s offer was that of Facebook stock as against cash, which made it a no brainer NO from Ev Williams and company. According to BoomTown:
The $500 million offered was in an all-stock form, said sources on both sides, at the $15 billion valuation that came from the Microsoft investment in the company last October.
The Twitter side felt that figure was inflated and the shares should be valued at the lower figures that have also been reported for Facebook’s true valuation, more in the $5 billion range.
That would have given the deal a $150 million price tag, which was seen as too low, especially since it was in Facebook stock and not cash.
In fact, Twitter wanted cash, which was not possible for Facebook, or Facebook stock at an even lower valuation that $5 billion.
