What Is Snapchat Thinking?
News broke today that Snapchat has refused a whopping $3 billion buyout offer from Facebook (NASDAQ:FB). Some are comparing this move to Facebook's refusal to be bought out by Yahoo! (NASDAQ:YHOO).
While the general consensus from financeland seems to be that Snapchat made a blunder (including myself), I do have to admit that there might actually be some good to this. Matthew Yglesias over at Slate makes a fairly convincing argument that the founders of Snapchat can now "reach for the stars" and try to develop their company more without being potentially stifled by another company's ideas or overarching corporate structure. After all, Yahoo!'s Flickr is a great service, but its effectiveness is stymied by the company who owns it.
But still, a $3 billion offer for a company with exactly zero revenues is a hefty sum. And Groupon (NASDAQ:GRPN) has suffered after it rejected a buyout deal from Google (NASDAQ:GOOG).
Overall, we'll see what happens next for Snapchat after this deal fell through. I personally feel that $3 billion was more than a fair deal for Snapchat executives to sell the company to Facebook, and Facebook would have been boosted if the deal went through. But who knows - I might look back in a few years and say I was wrong.