8 ms·
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 bidd
by Riod 11y ago
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 11y agoI 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 11y agoIt 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.