4 ms·

I don't think that the only path forward is an M&A since they have plenty of cash, good revenue, and a reasonable product strategy. Doesn't mean, like any start

I don't think that the only path forward is an M&A since they have plenty of cash, good revenue, and a reasonable product strategy. Doesn't mean, like any startup with way less traction, they wouldn't consider one at the right price.

JumpCrisscross 10y ago
Twitter have $4.4bn of current assets, half a billion of current liabilities and $1.5bn of long-term debt. That leaves $2.4bn unencumbered (of which $900MM are trade receivables and prepaid expenses). Meanwhile, they're losing half a billion a year. Google is saying no to paying $18bn (just under $15bn in enterprise value) for that. I have a tough time valuing it north of $5 or 6bn EV, and that's assuming $500MM in earnings within 6 years (and break-even in fewer than 3).
- snowwrestler 10y ago
  What happened between this article, and now? http://www.usatoday.com/story/money/markets/2016/01/25/twitter-has-412-years-fix-itself/79301680/ http://www.usatoday.com/story/money/markets/2016/01/25/twitt...
- GreenPlastic 10y ago
  And 2B in revenue - it's worth it for some private equity firm to come in, pay more than 10B, fire everyone except an essential staff and milk the revenue stream.
  - deleted 10y ago
    [deleted]
  - lordnacho 10y ago
    That's how I see it as well. A cash cow, a kind of infrastructure that never really adds anything new. Perfect for PE. I was in their office last year, talking to people who had nothing at all to do with the core product. There seemed to be all sorts of APIs and whatnot that they are trying to push, all of it marginal in relation to what most people think of Twitter.
- kalleboo 10y ago
  I wonder how much in costs they can cut if they can quit desperately throwing everything at the wall in order to find more growth (no way are all 4000 developers working on the core product)
  - brianwawok 10y ago
    Do they have 4k developers or 4k employees?
- baccheion 10y ago
  Based on their balance sheet, it seems they have net assets (~$6.6 billion in assets - $2 billion in liabilities) of $4.556 billion. Am I doing the Math wrong?

JumpCrisscross 10y ago

Twitter have $4.4bn of current assets, half a billion of current liabilities and $1.5bn of long-term debt. That leaves $2.4bn unencumbered (of which $900MM are trade receivables and prepaid expenses). Meanwhile, they're losing half a billion a year. Google is saying no to paying $18bn (just under $15bn in enterprise value) for that. I have a tough time valuing it north of $5 or 6bn EV, and that's assuming $500MM in earnings within 6 years (and break-even in fewer than 3).

snowwrestler 10y ago
What happened between this article, and now? http://www.usatoday.com/story/money/markets/2016/01/25/twitter-has-412-years-fix-itself/79301680/ http://www.usatoday.com/story/money/markets/2016/01/25/twitt...
GreenPlastic 10y ago
And 2B in revenue - it's worth it for some private equity firm to come in, pay more than 10B, fire everyone except an essential staff and milk the revenue stream.
- deleted 10y ago
  [deleted]
- lordnacho 10y ago
  That's how I see it as well. A cash cow, a kind of infrastructure that never really adds anything new. Perfect for PE. I was in their office last year, talking to people who had nothing at all to do with the core product. There seemed to be all sorts of APIs and whatnot that they are trying to push, all of it marginal in relation to what most people think of Twitter.
kalleboo 10y ago
I wonder how much in costs they can cut if they can quit desperately throwing everything at the wall in order to find more growth (no way are all 4000 developers working on the core product)
- brianwawok 10y ago
  Do they have 4k developers or 4k employees?
baccheion 10y ago
Based on their balance sheet, it seems they have net assets (~$6.6 billion in assets - $2 billion in liabilities) of $4.556 billion. Am I doing the Math wrong?