Snapchat Rejected $3 Billion Buyout Offer from Facebook

wow, thats alot of cash, i would take it if it were my company, for 50% of the shares :v

Facebook has been losing a ton of their teen viewers recently... Snapchat is what the kids love and have been migrating to. Facebook is trying to grab a hold of those viewers again.

I agree with above posts but I think that snapchat made a mistake. They should have taken the $3Billion. The kid/teen market is fickle and probably the quickest to jump to something new. Justin Bieber just launched a "selfie" app. If someone like that launched a competitor to snapchat - it would really hurt them.

I personally think that SnapChat was insane to deny the $3,000,000,000 offer from Facebook. It was a CASH offer, all money, no Facebook stock.

Just consider this:

Snap Chat still has NO monitization plan.
Snap Chat is NOT a public company, that money would have gone right to the creators
Snap Chat IS mostly used by teens who are fickle and will jump on the next bandwagon quickly forgetting all about this in a year or two at most.

Sure they might get more money next year, but then again they might also not. $3 billion is a lot of money, in fact the average American will make about $3 million dollars in there entire life time. So its litterly enough money for 1000X people for life.

There are 2 main founders / owners of Snap Chat. Divide the sale price between the two of them and they would each have had 500X what the average American will earn in there entire life time, all before they turned 30.

Very silly to me for them to take the risk of total financial security for themselves and there family on the hope that they could get more later. Seems like a silly risk. I mean once you get to the point of "I have more money than I can spend in my life time" .. who cares about more anyway.

Personally I think they passed on a HUGE windfall.

He rejected it because he's looking at an offer for nearly $4 billion.

Well glad to see some startup out there that is not selling out. Seems that many of the big companies are trying to stay ahead of the game by buying smaller startups.

I wonder if Snapchat rejected the offer because they looking for higher bid after they monetize it or because they just not planning to sell

Crazy.

It will be worth $500,000 in 5 years.

Snapchat made a huge mistake... Unless they're in talks with someone else to make another offer, or want facebook to offer more money.

It's foolish to believe your company will be worth >=$3b.

How hard would it be for a competitor to divide the market with aggressive marketing if they can somehow legally duplicate snapchat's technology?

It's true that their technology is idol'd by teens. But how much would it take for Zuckerburg (or anyone) to create and promote the hell out of a system similar to snapchat?

They should have taken the money.

Just my $.02, not looking to argue with anyone who thinks I'm incorrect.

Id take that offer in a heartbeat, 3 billion for something that doesnt even make money, at least so i read

I've never heard of SnapChat....until today!

It is amazing how these non-monetized companies receive such huge valuations....and buyout offers. I guess the lesson here is that it pays to always be generating online ideas to develop that future Twitter or SnapChat....as well as finding some good programmers to help set it up!

It's only crazy to decline the offer if there's not something else brewing.

Nobody here is likely to be in receipt of all the facts.

Hopefully, their future doesn't look like Groupon's. Groupon famously rejected Google's buyout offer, went IPO, and quickly went nowhere.

I would be surprised if the entire group of people who work at snapchat would not get a percentage of the sale price rather than just the 2 founders..

In addition, they have a lot starter money people they have to take care of..

So 3 billion sounds like a lot but once all divided up U may only get a few million,..

I'll take it...!!!

Don't understand though the fascination with the teen audience... bless the kids, but the easiest to acquire and the easiest to lose, plus they have no money to spend...

I imagine the goal is to acquire the kids, like a testing ground, so the adults say "Wow, that's neat, let me join.."

So once the adults join up U can start monetizing with advertising, and the kids will go on on the next big new thing..

not everyone starts a business to make money. Some people really put their heart into what they are doing, and having facebook prostitute out your idea as their own may not be something you want to do.

Even for 3 billion dollars.

Sure it sounds good to take the money and run from our perspective.

Of course they would have received a nice bit of change from that, probably an enormous amount. But I'm sure it would not have gone all to the two founders. Surely they have investors and venture capitalists who pumped money into this project that they would need to pay.

In fact, perhaps they made the decision not to sell with some of their investors. Perhaps they know a bigger offer will come or they have grander plans. Money isn't everything...

Snapchat if it positions itself correctly will be able to be an incredible channel for marketing your business. It is viewed currently as a stupid app for college/high school aged kids but will be able to be used incredibly well by businesses who think creatively and figure out how to really use it for their business

As spectators we can call them foolish, but the majority of their stock is owned by VC's that know when to sell.

Also Google offered them $4B today, which they rejected as well.

Why would you not accept that kind of money for an app like SnapChat? *facepalm*

I think it's crazy. The app doesn't even work the way it is supposed to. You can easily take a screenshot of whatever is sent.

I don't care how much you "think" you're worth, fads come and go overnight. If you're two years old and have zero dollars in revenue, and someone offers you $3 billion to walk away, the answer should always be YES.

To put that number into perspective ... if all you ever did was throw it in a money market account, you would earn approximately $400,000 per day in interest alone.

the reason is huge userbase which share 350 million pictures in one day. Just think of the revenue this will generate with increase in usage.

Is SnapChat an MLM company?

Just how much money does SnapChat think they will earn in the next few years? We're not talking millions, this is BILLIONS and most people have not even seen a tenth of that. Very high minded of the owners to imagine Snapchat will be popular long enough to earn more than three billion dollars.

First I've heard of it is when reading this thread.

I'm guessing if FB and Google are both bidding on it they're hoping for a price war.

Digg entered talks with Google in 2008 about selling to them. Google offered $200m which Digg refused because they believed they'd be worth much more in years to come. Four years on Digg only sold for $500,000.

They want more money! Who can blame them?

Wow what I don't seem to figure out is what the hell does Google and Facebook see in it that makes it worth 3 or 4 billions? As far as I can comprehend this, it is a picture sending app with only about 10 million users and as far as I can comprehend all it does is put a caption on the picture. Wt the hell? I know Facebook is crazy but if Google and Chinese are taking interest in it, then I'm missing something here.

Oh and the founder is just 23 years old. Boy o boy, he's gonna have a good life.

Mr Founder, I would like to have a chat with you, and snap you... lol unbelievable

Wow, he declined a 9 figure numbers? I hope that he knows what he's doing.

Everyone here saying he should of taken the money and that hes an idiot...wheres your $4 Billion dollar company?

Maybe he already has enough money and just wants to create something cool that people enjoy using instead of selling it off to companies that are just going to use it for cash gain.

While (at first) it seems "shocking" to refuse $3B or $4B, for Zuckerberg $3B is change. Zuckerberg knows that snapchat would offer them something which they urgently need. And I guess the snapchat kiddos know that too. So..let ZB bid $10B....

Who accepts the very first offer?

Yes, there's a possibility no other offer could come along, especially considering Snapchat has no revenue stream (yet). But I have a feeling a better offer will come along and they'll jump.

23 year old turning down 3B dollars.. Im jist shaking my head...

$3000000001?

SnapChat has had around $100 Million invested into it. So the actual founder may not have had the final say on the offer. He could have already sold 95% of the company to investors for all we know.

My thoughts exactly:

So what? Everything is relative.

Maybe the owners of Snapchat have
much larger larger plans for the startup
than we thought. Then again, we only
know what the media reports.

I think they must have something going on that they didn't want to sell. I am glad they didn't sell to be honest.

Even if they do get a bigger payday down the road that still doesn't mean that it was a smart decision to pass. Selling for 3 Billion changes lives for generations. Practically speaking there is no difference between 3 Billion and 10 Billion. But there is a huge difference between 3 Billion and $500,000. And there are several companies that passed on big offers and ended up selling for similar.

Wow is right...

It amazes me how much money is tossed around in social media related assets. I think they are insane for not taking that offer. I don't see anything special about snapchat to begin with beyond the user base, which is what they are after.

That's a crazy amount of money.

I'm a financial/investing guy, and I spend a lot of my time on it, so I'll try to give you my speculation. Over the past year, Facebook has seen it's daily users drop, especially among younger users (think teens and college students). They are mainly migrating to services like Instagram (which Facebook already bought) and Snapchat (which Facebook is trying to buy). They see this as a huge threat (rightly) which is why they are offering such a high price for a company with questionable fundamentals like Snapchat.
Snapchat meanwhile knows it is in the position of power in this deal (Facebook needs Snapchat to avoid becoming the next MySpace, Snapchat doesn't need more money) and can probably receive a better offer later, or just keep running the company and eventually pull in a profit.
Hope this helped clear it up, and I'm currently working on an article for a large financial publication on the subject of this, and the threats that could potentially turn Facebook into the next Myspace.

Well as it is right now its about google vs. facebook for the race to "win the internet'".

So if he(and his investors) got 3 billion from fb and 4 by G he probably knows that he might be able to push it towards 5-6 billion.
If he is financed by lets say 75% then double the price is a very big amount in relation to anything you can buy out there.

In my humble opinion, it's absolutely insane to turn down a 3 billions bid for an app that A) generates no revenue whatsoever and B) that targets a very volatile (and financially challenged) audience such as teenagers.

Facebook is losing appeal to teens and losing business to people who are not making sales.

I think it's smart they rejected the first offers.They want the bidding war to ensure they get the best deal.

WeChat has found ways to make money from their applications through virtual goods and games. You can subscribe to a Starbucks ad for notifications and receive exclusive emoji to use there. Snapchat and others just need to get more creative and give the teens things they would enjoy using.

"Worth $19 billion"... Nonsense!

Some does it not for the money. Maybe the owners think, Snapchat may one day be bigger than Facebook (I doubt). Or just holding on for a biiger cut maybe from Microsoft or Wechat. It's a mind game.

This is a two year old zombie thread kids!

Snapchat is full of teens. They have no money