Facebook Investor Explains Why Facebook Twitter Acquisition Never Happened

facebookFacebook investor Peter Thiel recently did an interview with BusinessWeek and gave his view of why Facebook never acquired Twitter. He said that the deal would have mainly been done with Facebook stock, but the valuation of the Facebook stock is arbitrarily questionable. As Facebook is a private company, it chooses to keep its financial positions, well, private. Twitter was made aware that the Facebook valuation was between $8 billion to $9 billion, but Twitter was made aware that Facebook employees were in fact trading stocks at more than half of that value. More recently, uncovered in court documents from the ConnectU v. Facebook case, Facebook apparently values itself at $3.7 billion, a valuation substantially less than Microsoft’s $245 million investment at a $15 billion Facebook valuation in October 2007. Twitter was founded in Mar 2006 and has received up to $55 million in VS funding to date.

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Hercules holds a B.Comm Finance from Ryerson University in Toronto, Canada. He is a Chartered Financial Analyst (CFA) level 3 candidate. He was previously a contributor at FiLife, a finance website owned by Dow Jones and IAC. Write to [email protected]
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