Snap, Inc., the company that now trades on Wall Street and is also behind the popular social media application ‘Snapchat’, rejected a $3 billion bid from Facebook in its infancy. According to a new report, the company was offered 10 times that amount by Google in early 2016.
Business Insider reports that Google wanted to acquire the company for $30 billion according to sources close and inside the company. The offer was discussed before Snap, Inc. managed to raise a round of private funding that values almost $20 billion.
However, ever since then Facebook launched similar features to Snapchat across all their social media applications namely Whatsapp, Facebook and Instagram which has resulted in brands preferring to advertise on Facebook’ apps over Snapchat. Some of the investors and even employees of Snap may have wished that the company had taken the offer and we agree with that notion as well.
Snap’s market cap has been in a steady state of decline since its IPO and the shares are currently trading around $12.50 which values the company at $14 billion. This number may sound like a lot, however, when the company went public, it had a market cap of $24 billion which denotes a drop of $10 billion in value.
Snap’s stock will continue to sink unless the company does something revolutionary with their current product. The rumours of a buyout may have been a result of people hoping Snap will get acquired.
Google has always wanted to own a very successful social network product and had tried several times to penetrate the market with Google+. In 2013, Google tried to acquire Snapchat for $4 billion after Spiegel (CEO of Snap, Inc.) turned down Zuckerberg’s offer.
Google buying Snap could help the platform in terms of generating ad revenue as Google is raking in most of all digital ad money via various platforms. It would also be a good move by Google to compete with a Facebook and perhaps Apple.
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