By no means are we apologizing for our reporting yesterday when Michelle Jones reported on speculation and reports that Twitter Inc (NYSE:TWTR) was looking at acquiring Soundcloud, the German company that has been called the “YouTube of Audio”, yesterday. In fact, her reporting made it clear that it was the type of speculation that makes its rounds through the tech world on a daily basis citing a story by Re/code in which they used sources close to the negotiations. By no means am I slagging off Re/code either. The website, considerably more often than not, breaks important stories based on its sources and there is already an update on the story they published yesterday as I write this.
What is SoundCloud?
For those unfamiliar with SoundCloud, I suggest you revisit Ms. Jones’ piece that goes a long ways towards explaining Twitter’s reported interest in the company that allows users to upload and share their music.
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Apparently, the deal is off, or at least it is for now according to Yoree Koh And Chase Gummer at the WSJ.
In the piece they published today, the two are reporting that they spoke with someone close to the deal who said “the numbers didn’t add up,” as Twitter let the exclusivity agreement reached on the talks run out. It remains ambiguous still as to who initiated the talks that could have potentially seen Twitter make its largest-ever acquisition.
High or low valuation?
Following a recent round of funding, SoundCloud raised $60 million at a valuation of around $700 million. Last October, Twitter Inc (NYSE:TWTR) acquired MoPub, the mobile ad network, for $350 million.
“That Twitter would even consider buying Soundcloud at its current valuation is good for the German startup world,” said Christian Nagel of Earlybird, a German venture-capital firm. “But it would also be unfortunate for one of the German startups with the best chance of long-term value to get swallowed up this fast.”
Well, that seems to be a moot point now but does beg the question, “Which company walked away?”