[karangoeluw]

> spending 3X the public market valuation

Just last year, Twitter’s market cap was more than double what it is today. Since then, they have managed to grow revenue by 48% while reducing the losses by 9%. So, with all that, I think $29B is a steal for the acquisition.

EDIT: my last response here was uninformed.

> And speaking about science fiction, what will Alphabet/Google do to turn around Twitter?

Clearly you have not read the post, and are jumping to conclusions.

[Riod]

If it is an early stage company that has the ability to not just increase revenue/customer but also total number of customers.

Also the competition in the bidding process matters. There are a limited number of players who can/will swallow an acquisition this size. Public companies never get bought for these numbers. Why would Google bid that when a 30-40% premium would be enough for most shareholders to vote yes?

On twitter itself, I feel the quote, "clown car that fell into a goldmine" attributed to mark zuckerberg is pretty appropriate.

[karangoeluw]

I don't have numbers, but a lot of shareholders are still out of the money - they bought when the price was climbing from ~40 to the peak of 70.

I doubt that a 40% premium will be enough. But I can see your skepticism. A lot of acquisitions never make sense.

[Riod]

It would most likely not get past Google's board. And investors would crucify them for paying that kind of premium for a stalled social network (aka don't get the incremental benefits of growth via network effects). They would be left with 1) increase revenue/user or 2) cut costs.

Periscope doesn't fulfill the "toothbrush" principle, aka stuff that you use every day. That's how Google does M&A. Their corporate development people have talked about it publicly.

Also, the shares turnover every 26 days given that about 26MM shares trade every day. Hard to say that a majority of the shareholder base would not accept a 40% premium.

[wslh]

> 3x is not a crazy multiple for a company that has grown revenue by 48% and decreased losses by 10% (yoy)

Tell me please of other public companies which also were acquired by public companies for that multiplier.

> Clearly you have not read the post, and are jumping to conclusions.

I read the post and it offers a childish reason why Twitter should be acquired by Google.

[SomewhatLikely]

Googling for "premium on the stock's previous closing price" reveals a few non-tech deals, none of which are above 1.5x

[Riod]

I think ^^ is the guy who wrote the post. But he is still off the mark.

[karangoeluw]

See my edited response in the parent comment.

[joe_the_user]

I don't know about childish but the argument seems very 2012 or something. Twitter is going to keep bigger 'cause social is the thing! That's it?

It seems like there's good evidence that Twitter is limited by the Twitter - most people don't like to scream at the world (post a stream of public crap) and for those that do, Twitter is kind of the lowest quality pedestal to stand while you do so.