[gwern]

> If Twitter was prepared to make a higher offer, why didn't they?

Why should they? They have a fiduciary duty to get Instagram for as low a price as possible; nothing about 'begging', they weren't even told about the higher time-sensitive offer (which are just two parts of the price to be negotiated...). They were told Instagram didn't want to sell at all, which is more than a little bit different from 'we think FB will pay more, do you disagree?'.

> The people familiar with the negotiations said Twitter executives were shocked that they had not been given an opportunity to present a counteroffer. They said Twitter was prepared to make higher offers.

[jonathanmarcus]

Twitter had their chance. They offered roughly 50% less than Facebook, and without a liquid currency to boot. Apparently, they weren't even in the ballpark. It wasn't Instagram's responsibility to negotiate with Twitter given the relative disparity between the offers. If they chose not to take Facebook's offer, and hold out for Twitter to increase their offer by 100%, again, without it even being a liquid offer, they would have run the risk of Facebook walking away and being completely at the mercy of Twitter.

[gwern]

As you pointed out, time is part of a deal - and so Instagram could easily have said 'we close in a week with FB, offer more than their billion and liquidity in that time with a high penalty fee or forever hold your peace'. They didn't.