Former CEO of The Next Web. A fan of startups, entrepreneurship, getting things done faster, penning the occasional blog post, taking photos Former CEO of The Next Web. A fan of startups, entrepreneurship, getting things done faster, penning the occasional blog post, taking photos, designing, listening to good music and making lurrrve.
In an interesting interview with Business Week, Peter Theil, one of Facebook’s early investors and currently on the board of Directors, said the much discussed Facebook/Twitter deal fell apart over “price and Structure’.
The article quotes the initial post from tech site All Things Digital, which brought the story to the blogosphere, throwing a figure of approximately $500 million for Twitter – the majority of which was Facebook stock. It is the calculation of value for the ‘stock’ which seems to have been and the main reason for Twitter’s reluctance to accept Facebook’s offer.
Representatives of Twitter liked the sound of $500 million but balked when Facebook said its stock was worth $8 billion to $9 billion. Twitter’s team knew that Facebook was letting employees sell stock on the secondary market at company valuations ranging from $2 billion to $4 billion. “We said it’s not worth it,” the person says. “Don’t treat us like children.”
At that point, Facebook offered Twitter around $100 million in cash, with the rest of the deal in stock. Facebook said it would come up with the $100 million by selling more of its stock to outside investors.
Twitter agreed on one condition: that the Facebook stock it received be valued at the price company shares garnered on the open market. Facebook blinked and the deal talks ended.
According to the Thiel, Facebook and Twitter are still in “conscious dialogue”, so a deal could still be on the table – although holding your breath is not recommended.
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