Peter Thiel Opens Up About Why Facebook’s Bid For Twitter Failed
Co-founder of PayPal and early Facebook investor Peter Thiel has opened up why Facebook’s bid for Twitter failed in an interview with BusinessWeek. The primary reason for the failed bid was because the valuation of the social network fluctuated quite a bit. Between Microsoft’s valuation, the settlement with ConnectU, and Facebook employees selling stock at between a $2-$4 billion valuation, it is not actually known what Facebook is worth. So when Twitter was offered $500 million in mostly Facebook stock, they decided to pull out of the deal.
Facebook told Twitter that their stock was worth about $8-$9 billion. And the Twitter team knew that employees were selling stock at $2-$4 billion. Then Facebook offered Twitter $100 million in cash and the rest in stock. Facebook would make $100 million for Twitter by selling stock to outside investors. Twitter would have agreed if Facebook offered stock in the form of what the shares would earn on the open market.
Thiel did not reveal how much he thinks Facebook is worth. “It’s worth more than people think it is,” is what Thiel had to say about Facebook. Facebook is still open to acquiring other companies.
[via BW]This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry