Author Topic: Snapchat turns down $3B acquisition  (Read 10008 times)

Paul der Krake

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Snapchat turns down $3B acquisition
« on: November 13, 2013, 08:26:27 PM »
Currently on a leading tech news aggregator:

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

So assuming this guy owns anywhere from 20 to 70% of the company, he has the opportunity to establish a dynasty for himself and the next 15 generations overnight, and he turns it down?


msilenus

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Re: Snapchat turns down $3B acquisition
« Reply #1 on: November 13, 2013, 09:00:42 PM »
Step aside, Jerry Yang.  A new king is born.

beltim

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Re: Snapchat turns down $3B acquisition
« Reply #2 on: November 13, 2013, 11:45:25 PM »
I don't get it. If he doesn't want to sell, why should he? He's doing what he wants to do, and has enough money to do it. Isn't that the definition of being financial independence?

Angelfishtitan

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Re: Snapchat turns down $3B acquisition
« Reply #3 on: November 14, 2013, 10:23:35 AM »
I am not sure if anyone actually read the article, but I think he made a smart move for his business. Facebook was making an offer of $1B, then recently increased it to $3B. One e-commerce company is valuing the company at $4B, not surprising considering Facebook decided to triple its offer over a relatively short time period. With the growth that the company is currently seeing (nearly doubling in three months) it would not be surprising it would increase even more by early next year which is the time period that Evan Spiegel, the owner, was talking about selling. Much like Twitter, this company is unprofitable, and I personally don't see the value that the markets have been putting into these tech companies but it still probably a good choice on his part.

An owner making a decision (and a relatively good bet in my opinion) for his company that he believes will increase its worth seems pretty mustachian to me. It is being patient for greater term gain.

Mr.Macinstache

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Re: Snapchat turns down $3B acquisition
« Reply #4 on: November 14, 2013, 10:33:34 AM »
Again, though, how long can Snapchat hold on to the marketshare? I view it as a novelty, then again, maybe there something I'm not seeing with this Snapchat.

olivia

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Re: Snapchat turns down $3B acquisition
« Reply #5 on: November 14, 2013, 10:43:01 AM »
Considering how fickle social networks tend to be (Friendster and MySpace anyone?) and considering that SnapChat does not actually make any money, if I were this guy I would sell it ASAP.  I'd call back FB and beg for them to give me the money after all.

Angelfishtitan

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Re: Snapchat turns down $3B acquisition
« Reply #6 on: November 14, 2013, 10:47:30 AM »
Again, though, how long can Snapchat hold on to the marketshare? I view it as a novelty, then again, maybe there something I'm not seeing with this Snapchat.

I would agree if it had hit a peak, but honestly it sounds like they only just started getting into the marketshare. It doesn't state number of regular users, based on the number of "snaps" and some other articles it is probably only on the order of 10-25 million, you are talking only ~1-3% of Facebook's and Twitter's userbase. Even with that small number, it is matching Facebook for number of photos shared per month. The owner isn't talking about waiting years either, but a few months while it is on the upswing. He doesn't sound like he wants to pull the same mistake so many other web companies have in regards to when to sell.

Paul der Krake

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Re: Snapchat turns down $3B acquisition
« Reply #7 on: November 14, 2013, 10:50:23 AM »
Considering how fickle social networks tend to be (Friendster and MySpace anyone?) and considering that SnapChat does not actually make any money, if I were this guy I would sell it ASAP.  I'd call back FB and beg for them to give me the money after all.
That's how I read it as well. Who cares if you can get a "better deal" (whatever that means in the wild west of tech valuations) when the offer already on the table is already more money than anyone could ever need?

@beltim: maybe the article doesn't reflect his state of mind, but they make it sound like he's staying put because he thinks he can get more 6 months from now.

I would have sold at 1/10 of that price...

LDoon

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Re: Snapchat turns down $3B acquisition
« Reply #8 on: November 14, 2013, 11:24:56 AM »
Based on the rising use of SnapChat (it's still growing at a high rate), I agree with the owner to wait 6-10 months before entering serious talks.  Yes, he could cash out and get an enormous amount of money for this company.  But which the projected growth of users, the owner has a chance to increase the sale price by 2 or 3 times the current valuation.

I'd definitely risk holding onto an asset or company in order to double or triple my profit in less than a year.  If the bubble bursts before he can sell, then he'll regret it.  But the owner will never to another chance to increase his network that much in such a short time period.

Mr.Macinstache

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Re: Snapchat turns down $3B acquisition
« Reply #9 on: November 14, 2013, 12:09:06 PM »
Considering how fickle social networks tend to be (Friendster and MySpace anyone?) and considering that SnapChat does not actually make any money, if I were this guy I would sell it ASAP.  I'd call back FB and beg for them to give me the money after all.

Agree with that, but the lifespan has been longer lived. I think there is a reason FB tripled that offer in a short amount of time. There is tremendous value there. I think the owner is smart to hold off given the trajectory of growth so far. And that is easy for me to say. I would've taken 1B and set sail for life on easy street.

Spork

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Re: Snapchat turns down $3B acquisition
« Reply #10 on: November 14, 2013, 01:22:20 PM »
Considering how fickle social networks tend to be (Friendster and MySpace anyone?) and considering that SnapChat does not actually make any money, if I were this guy I would sell it ASAP.  I'd call back FB and beg for them to give me the money after all.

Agree with that, but the lifespan has been longer lived. I think there is a reason FB tripled that offer in a short amount of time. There is tremendous value there. I think the owner is smart to hold off given the trajectory of growth so far. And that is easy for me to say. I would've taken 1B and set sail for life on easy street.

Honestly I'm pretty sure snapchat is going to be exposed as the Emperor and his new clothes.

This app is a legal nightmare and promises what it cannot deliver.  They've already been found that the "we show them and delete them" doesn't happen.  (They're still there!)  There are already several apps that can grab the snaps and store them.  Having a reasonable idea how tech stuff works, I'd also be pretty sure they pass through a server and get stored (at least temporarily, if not permanently.)

Most of this is being done by young 'ens that don't know any better sending nekkid pics to each other.  I'd make an educated guess that there is a good deal of underage kids doing it... and while they're sending from underage kids to underage kids: the law still sees it as child porn.  A couple of subpoenas is all it's going to take to turn this business upside down.

tooqk4u22

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Re: Snapchat turns down $3B acquisition
« Reply #11 on: November 14, 2013, 03:27:25 PM »
Again, though, how long can Snapchat hold on to the marketshare? I view it as a novelty, then again, maybe there something I'm not seeing with this Snapchat.

I would agree if it had hit a peak, but honestly it sounds like they only just started getting into the marketshare. It doesn't state number of regular users, based on the number of "snaps" and some other articles it is probably only on the order of 10-25 million, you are talking only ~1-3% of Facebook's and Twitter's userbase. Even with that small number, it is matching Facebook for number of photos shared per month. The owner isn't talking about waiting years either, but a few months while it is on the upswing. He doesn't sound like he wants to pull the same mistake so many other web companies have in regards to when to sell.

Twitter has about 250 million users and is worth $31 billion....estimates for snapchat users are about 25 million, so 10%....10% of twitter value is $3.1 billion.....this is not coincidence.  Also keep in mind that FB stock has doubled since August so for them it is like spending $1.5billion.

Either way a bird in hand, right.....$3 billion for this crap.....feels real frothy. Shit sell it then do something else, go buy a basketable team with your newfound unbelievably lucky fortune ala mark cuban.


olivia

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Re: Snapchat turns down $3B acquisition
« Reply #12 on: November 14, 2013, 03:32:54 PM »
Considering how fickle social networks tend to be (Friendster and MySpace anyone?) and considering that SnapChat does not actually make any money, if I were this guy I would sell it ASAP.  I'd call back FB and beg for them to give me the money after all.

Agree with that, but the lifespan has been longer lived. I think there is a reason FB tripled that offer in a short amount of time. There is tremendous value there. I think the owner is smart to hold off given the trajectory of growth so far. And that is easy for me to say. I would've taken 1B and set sail for life on easy street.

Honestly I'm pretty sure snapchat is going to be exposed as the Emperor and his new clothes.

This app is a legal nightmare and promises what it cannot deliver.  They've already been found that the "we show them and delete them" doesn't happen.  (They're still there!)  There are already several apps that can grab the snaps and store them.  Having a reasonable idea how tech stuff works, I'd also be pretty sure they pass through a server and get stored (at least temporarily, if not permanently.)

Most of this is being done by young 'ens that don't know any better sending nekkid pics to each other.  I'd make an educated guess that there is a good deal of underage kids doing it... and while they're sending from underage kids to underage kids: the law still sees it as child porn.  A couple of subpoenas is all it's going to take to turn this business upside down.

Yikes, didn't even think about that.  Clearly I'm too old to send nekkid pics.  But all you'd need to do is screenshot the pic, right?  That's as easy as holding down the top button and home button on the iPhone. 

Let's hope the SnapChat dude reads this thread, calls FB back and takes the $.

mlipps

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Re: Snapchat turns down $3B acquisition
« Reply #13 on: November 14, 2013, 03:35:53 PM »
Considering how fickle social networks tend to be (Friendster and MySpace anyone?) and considering that SnapChat does not actually make any money, if I were this guy I would sell it ASAP.  I'd call back FB and beg for them to give me the money after all.

Agree with that, but the lifespan has been longer lived. I think there is a reason FB tripled that offer in a short amount of time. There is tremendous value there. I think the owner is smart to hold off given the trajectory of growth so far. And that is easy for me to say. I would've taken 1B and set sail for life on easy street.

Honestly I'm pretty sure snapchat is going to be exposed as the Emperor and his new clothes.

This app is a legal nightmare and promises what it cannot deliver.  They've already been found that the "we show them and delete them" doesn't happen.  (They're still there!)  There are already several apps that can grab the snaps and store them.  Having a reasonable idea how tech stuff works, I'd also be pretty sure they pass through a server and get stored (at least temporarily, if not permanently.)

Most of this is being done by young 'ens that don't know any better sending nekkid pics to each other.  I'd make an educated guess that there is a good deal of underage kids doing it... and while they're sending from underage kids to underage kids: the law still sees it as child porn.  A couple of subpoenas is all it's going to take to turn this business upside down.

There are plenty of kids who are doing that, but I don't think 10-25 millions users are just using it to send nekkid photos. It's just fun. I send my friends all kinds of dumb photos, none of them naked.

burly

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Re: Snapchat turns down $3B acquisition
« Reply #14 on: November 14, 2013, 03:49:01 PM »
Or he's badass enough to not need the 3BN? Kinda like MMM's post when he said no to chase about changing his site for the income from the credit card referrals..


Spork

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Re: Snapchat turns down $3B acquisition
« Reply #15 on: November 14, 2013, 03:50:12 PM »
The point is: you don't need a special "burn after reading" application to send pics to someone.  IM does it.  Email does it. SMS does it.  Anything in the world will send a pic.

"Burn after reading" pictures are typically wrapped in a veil of "I DO NOT want you to keep a copy."   ... and I assure you: copies exist.

grantmeaname

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Re: Snapchat turns down $3B acquisition
« Reply #16 on: November 14, 2013, 03:51:47 PM »
Is anybody else having pets.com flashbacks?

Psychstache

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Re: Snapchat turns down $3B acquisition
« Reply #17 on: November 14, 2013, 03:59:21 PM »
Considering how fickle social networks tend to be (Friendster and MySpace anyone?) and considering that SnapChat does not actually make any money, if I were this guy I would sell it ASAP.  I'd call back FB and beg for them to give me the money after all.

Agree with that, but the lifespan has been longer lived. I think there is a reason FB tripled that offer in a short amount of time. There is tremendous value there. I think the owner is smart to hold off given the trajectory of growth so far. And that is easy for me to say. I would've taken 1B and set sail for life on easy street.

Honestly I'm pretty sure snapchat is going to be exposed as the Emperor and his new clothes.

This app is a legal nightmare and promises what it cannot deliver.  They've already been found that the "we show them and delete them" doesn't happen.  (They're still there!)  There are already several apps that can grab the snaps and store them.  Having a reasonable idea how tech stuff works, I'd also be pretty sure they pass through a server and get stored (at least temporarily, if not permanently.)

Most of this is being done by young 'ens that don't know any better sending nekkid pics to each other.  I'd make an educated guess that there is a good deal of underage kids doing it... and while they're sending from underage kids to underage kids: the law still sees it as child porn.  A couple of subpoenas is all it's going to take to turn this business upside down.

There are plenty of kids who are doing that, but I don't think 10-25 millions users are just using it to send nekkid photos. It's just fun. I send my friends all kinds of dumb photos, none of them naked.

I wouldn't be surprised if it was close to 1-2 million users primary purpose. The great certainty of humanity is when we find something new, eventually someone will try to put their dick in it. As my deviance professor commented on technology "We didn't invent webcams so people could have pleasant chats with their grandmother."

Bruised_Pepper

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Re: Snapchat turns down $3B acquisition
« Reply #18 on: November 14, 2013, 04:18:51 PM »
There are plenty of kids who are doing that, but I don't think 10-25 millions users are just using it to send nekkid photos.

Sounds like someone has never been on the Internet before.

Which is strange because you're on it right now.

seattlecyclone

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Re: Snapchat turns down $3B acquisition
« Reply #19 on: November 14, 2013, 05:34:46 PM »
That's a tough one. $3B is hundreds of times more than any one person will ever need, so turning down that much money should be extremely hard for anyone to do. On the other hand, if he enjoys leading this company, already has a decent personal stash, and would rather keep running the company than give up control in exchange for cash, I can't really fault him too much for that.

dragoncar

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Re: Snapchat turns down $3B acquisition
« Reply #20 on: November 15, 2013, 01:22:19 AM »
Why doesn't twitter or Facebook just implement this?  I kinda doubt he has a patent, and it would cost way less than $3 billion to implement. 

Of course, I don't get it anyways.  Anyone can screenshot anything you send.  This is why I'll never be a tech billionaire ... Everything popular sounds really dumb to me.  I was a very early user of twitter and was like "so this is my Facebook status but shorter??"

Cinder

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Re: Snapchat turns down $3B acquisition
« Reply #21 on: November 15, 2013, 05:50:14 AM »
Why doesn't twitter or Facebook just implement this?  I kinda doubt he has a patent, and it would cost way less than $3 billion to implement. 

Of course, I don't get it anyways.  Anyone can screenshot anything you send.  This is why I'll never be a tech billionaire ... Everything popular sounds really dumb to me.  I was a very early user of twitter and was like "so this is my Facebook status but shorter??"

The biggest thing is acquiring the userbase.  Just like buying a lawncare service from a neighbor who is thinking of 'retiring' from it, you have a list of 'clients' that you can immediately hit the ground running with.  If they were to implement it themselves, I doubt they'd get anywhere close to the same use as snapchat already has.  why would the users switch when they already have a perfectly working way to do the same thing already?

Angelfishtitan

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Re: Snapchat turns down $3B acquisition
« Reply #22 on: November 15, 2013, 07:10:32 AM »
Twitter has about 250 million users and is worth $31 billion....estimates for snapchat users are about 25 million, so 10%....10% of twitter value is $3.1 billion.....this is not coincidence.  Also keep in mind that FB stock has doubled since August so for them it is like spending $1.5billion.

Either way a bird in hand, right.....$3 billion for this crap.....feels real frothy. Shit sell it then do something else, go buy a basketable team with your newfound unbelievably lucky fortune ala mark cuban.

Trust me, I don't understand the worth that people are putting in these companies but it is still happening. Twitter has been around seven years, yet to turn a profit, yet is worth $31B.

Is the guy taking a risk? Obviously. Is it worth it? Only time will tell. Is $3B plenty of money? Depends what you want to do with it. Spend it on yourself, obviously it is. Try and start a few more new companies, depends what they are. Solve world hunger, most liekly not. I honestly have no idea what this guy's plans are beyond this company.

mlipps

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Re: Snapchat turns down $3B acquisition
« Reply #23 on: November 15, 2013, 09:23:37 AM »
There are plenty of kids who are doing that, but I don't think 10-25 millions users are just using it to send nekkid photos.

Sounds like someone has never been on the Internet before.

Which is strange because you're on it right now.

Or I'm 24 years old and use Snapchat every day, and know none of us send naked pics.

dragoncar

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Re: Snapchat turns down $3B acquisition
« Reply #24 on: November 15, 2013, 01:31:03 PM »
Why doesn't twitter or Facebook just implement this?  I kinda doubt he has a patent, and it would cost way less than $3 billion to implement. 

Of course, I don't get it anyways.  Anyone can screenshot anything you send.  This is why I'll never be a tech billionaire ... Everything popular sounds really dumb to me.  I was a very early user of twitter and was like "so this is my Facebook status but shorter??"

The biggest thing is acquiring the userbase.  Just like buying a lawncare service from a neighbor who is thinking of 'retiring' from it, you have a list of 'clients' that you can immediately hit the ground running with.  If they were to implement it themselves, I doubt they'd get anywhere close to the same use as snapchat already has.  why would the users switch when they already have a perfectly working way to do the same thing already?

How many snapchat users don't have a twitter account?   Guessing very few

There are plenty of kids who are doing that, but I don't think 10-25 millions users are just using it to send nekkid photos.

Sounds like someone has never been on the Internet before.

Which is strange because you're on it right now.

Or I'm 24 years old and use Snapchat every day, and know none of us send naked pics.

Please explain it to me like I'm 70 then.  Why not just use MMS?  It's ridiculously easy.

Russ

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Re: Snapchat turns down $3B acquisition
« Reply #25 on: November 15, 2013, 01:54:49 PM »
Please explain it to me like I'm 70 then.  Why not just use MMS?  It's ridiculously easy.

You can draw on the pictures

mlipps

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Re: Snapchat turns down $3B acquisition
« Reply #26 on: November 15, 2013, 02:14:43 PM »
Please explain it to me like I'm 70 then.  Why not just use MMS?  It's ridiculously easy.

You can draw on the pictures

And it's just fun. Don't think too hard about it.

dragoncar

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Re: Snapchat turns down $3B acquisition
« Reply #27 on: November 15, 2013, 03:45:40 PM »
Please explain it to me like I'm 70 then.  Why not just use MMS?  It's ridiculously easy.

You can draw on the pictures

Useful... I have a program that adds cats to pictures and it's probably worth a few billion too

Tyler

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Re: Snapchat turns down $3B acquisition
« Reply #28 on: November 15, 2013, 09:11:59 PM »
Useful... I have a program that adds cats to pictures and it's probably worth a few billion too

LOL.  Apparently CatPaint has at least 2 users.  =^.^=

olivia

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Re: Snapchat turns down $3B acquisition
« Reply #29 on: November 16, 2013, 10:53:51 AM »
Useful... I have a program that adds cats to pictures and it's probably worth a few billion too

LOL.  Apparently CatPaint has at least 2 users.  =^.^=

HA make that 3!

Paul der Krake

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Re: Snapchat turns down $3B acquisition
« Reply #30 on: November 18, 2013, 10:10:59 PM »
HAHAHA!

Found this by accident re-organizing my bookmarks. It's from 2007 but still excellent.

http://www.youtube.com/watch?v=I6IQ_FOCE6I

olivia

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Re: Snapchat turns down $3B acquisition
« Reply #31 on: November 19, 2013, 01:14:12 PM »
HAHAHA!

Found this by accident re-organizing my bookmarks. It's from 2007 but still excellent.

http://www.youtube.com/watch?v=I6IQ_FOCE6I

HAHAHA newspapers + friendship bracelets is gold.