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Snapchat Spurned $3 Billion Acquisition Offer from Facebook

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PopEmersen

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Fastlane at its fastest.

Snapchat, a rapidly growing messaging service, recently spurned an all-cash acquisition offer from Facebook for $3 billion or more, according to people briefed on the matter.

The offer, and rebuff, came as Snapchat is being wooed by other investors and potential acquirers. Chinese e-commerce giant Tencent Holdingshad offered to lead an investment that would value two-year-old Snapchat at $4 billion.


http://blogs.wsj.com/digits/2013/11/13/snapchat-spurned-3-billion-acquisition-offer-from-facebook/
 
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SeanKelly

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F*cking ridiculous
 

RHL

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bophisto

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I just read this article a few mins ago too. I really can't believe it. There is huge risk that valuations could go down,users could go down..especially since most of their users are teens that are fickle and changing the services they use all the time.

The guy is 23...he could sell and do nothing or start any type of business he wants.

Sure there is the upside possibility of getting 4billion next year..but there is the downside of it being hard to get 500million or less next year....especially if the 'tech bubble'/optimism bursts.

I don't know how much of the company the CEO owns.
 

brandonrush

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I just read this article a few mins ago too. I really can't believe it. There is huge risk that valuations could go down,users could go down..especially since most of their users are teens that are fickle and changing the services they use all the time.

The guy is 23...he could sell and do nothing or start any type of business he wants.

This happened with Digg. Digg was once valued at $200,000,000 with offers on the table and he refused. Last I heard the site was worth about $500k.
 

dknise

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Formless

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I am not snapchat's founder.

But if I was, I would take the money and get the F*ck out, expecting to watch the empire burn within a year.

Who knows though. Who knows. It could burst. Or it could grow to $6bn. This will be interesting to watch.
 
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Vick

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personally i dont even know what sanpchat is. and i dont care.

but it's stupid to turn down 3 billion.

some people have no idea how much 1 billion actually is.

1 Billion is $1,000 a DAY for 3,000 YEARS.

sooo

3 Billiion is $1,000 a DAY for 9,000 YEARS.
 

The Autobahn

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Wait thats about 6 times the worth of Mayweather.. i think mayweather should KO him for turning that amount of money down.:p

[video=youtube;ZNrzOlX4leQ]http://www.youtube.com/watch?v=ZNrzOlX4leQ[/video]

Last time i checked the App on Google Play it had 3,5 stars out of 5.
 
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rkmalo1

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Personally, I'd take the offer. No question.

However, I know they have raised a TON of money, so I'm sure the VC's are pressuring for more and they haven't even made money yet (so there is potential, possibly).

Groupon was probably moronic when they turned down Google's offer of $6 billion years ago, Myspace was smart to take $580 million when they did, Facebook was smart to turn down Yahoo's offer of $1 billion in 2006. YouTube selling to Google for $1.65 billion - I don't know.

It's the gamble these companies take. I guess it's a matter of whether or not the founders want to continue as a stand alone company. In this case, it sounds like they are holding out for more - not the decision I would make with this company. But what do I know..:rolleyes:
 

Vick

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However, I know they have raised a TON of money, so I'm sure the VC's are pressuring for more and they haven't even made money yet (so there is potential, possibly).

sorry maybe im not gettin this.

are you saying that it cost SnapChat 3 Billion dollars up to this point?
 

bophisto

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Sorry, no ..actually I just looked it up. They have raised $73 million to date. Not nearly as much as I originally thought. But I'm sure they are still being pressured..

http://www.crunchbase.com/company/snapchat

Actually I would think the VC's would be pressuring them to sell for $3billion . It's rare for a startup to even get such an offer.

If there is only $73million invested with a $3billion sale i'm sure the VC's would profit very well.

What would the VC's be waiting for ...to go public?...
 

RHL

The coaching was a joke guys.
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FaceBook is just worried they are losing teens to SnapChat.

Not worried. I donate my time for after-school and youth group activities. Nobody under 20 uses Facebook. NOBODY.

Vine, Snap-Chat, and instigram are it for that market. I've specifically heard clear alpha-leaders in the teen social circles refer to Facebook as a "for old people" and saying, "you only use it because you're old (I'm 28)."

If you want a bite of that market, you go with one of the new guys. That said, especially if you're young, if anyone floats you a figure in the billions, get out. That bubble can pop, but your billions will still make you comfortable forever and let you do it again.
 
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mayana

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The only logic that I can see behind this move is that this was a really, really big marketing decision on his part.

Everyone will know about his company now... the question is, will this turn out to have been a big mistake? Maybe, in the sense that he might not ever see $3 billion again (maybe he will). No matter what happens after this, he'll probably be rich, even if his company's value plummets. He'll have no trouble getting capital to do another startup.

One thing that I know for sure is that this guy has GOT to have steel balls (can I say that?). Lol...
 

Rawr

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Details of the offer? not cash right?
 

Genium

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personally i dont even know what sanpchat is. and i dont care.

but it's stupid to turn down 3 billion.

some people have no idea how much 1 billion actually is.

1 Billion is $1,000 a DAY for 3,000 YEARS.

sooo

3 Billiion is $1,000 a DAY for 9,000 YEARS.

Or, from my perspective, if I live to be 90, that would give me $39,000 PER DAY to spend. Or buy an island to retreat to once in a while to escape and make chillout music.

:smx4: Who turns that down?
 
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Vick

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people who live in Bizzaro World.

OR

ego.
 

Pure5abi

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Well you never know what he has planned for the company. He might be seeing a good future and thats why he didn't take the offer. If anything goes wrong and the company starts to fall, he would not be a happy fella for sure.
 
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Russ H

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Details of the offer? not cash right?

This is the first correct question asked on this thread.

Buy out offers are often structured with contingencies.

For example, the Wimpy gambit ("I'd gladly pay you Tuesday for a hamburger today")-- where a large buy out offer is nothing more than thin air, based on paying off the shareholders with $$$ *after* an IPO. If the IPO is not approved or does not generate enough revenue, the buy out is cleverly structured to pretty much take away ownership but give little in return.

Another possibility: Paying w/stock options. This sounds great, but you all know what can happen w/stock valuations. Today's $3B is tomorrow's penny stock. Value goes WAY down to peanuts.

If the VCs are less than $100 mil into this, they would have snapped up a cash offer of even $500 mil, and tendered partial ownership or continued incremental payments.

It's easy for a press release to say "3 billion dollars".

It's harder to find out the details.

Details are the difference between making money...

... and losing everything.

-Russ H.

PS Good to see you on here Rawr. I was here to do some housekeeping, back to building my biz. ;-)
 

rkmalo1

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Another possibility: Paying w/stock options. This sounds great, but you all know what can happen w/stock valuations. Today's $3B is tomorrow's penny stock. Value goes WAY down to peanuts.

If the VCs are less than $100 mil into this, they would have snapped up a cash offer of even $500 mil, and tendered partial ownership or continued incremental payments.

It's easy for a press release to say "3 billion dollars".

It's harder to find out the details.

Details are the difference between making money...

Thanks for this post!
 

Jonleehacker

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Details of the offer? not cash right?

it says in the OP "all-cash"

For some people it isn't about the money.

Zuck wouldn't even monetize Facebook for years and years, despite having a massive user base and VC and investors pressuring him. He had a vision.

Anybody that starts a company like this and takes it this far is NEVER going to be short on cash. They have a personal brand and credibility that is worth billions. Money is irrelevant to him, which is real financial freedom.

The comments on this thread are not based on financial freedom thinking.
 

smarty

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3 billion? Take the money and run like hell with it ;)
 

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