[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.