Shares of Snap are up 1.74% after the report, bring the company back from Thursday’s record low near $US12. Snap is trading at about $US12.87 after the report.
According to the report, Google offered to buy Snap just before the company raised money for its Series F funding round that valued the company at $US20 billion. The $US30 billion offer is potentially still on the table, according to one source.
Earlier this year, Snap sought a valuation of $US24 billion in its initial public offering. The company was quickly disappointed as the stock has been mired in an almost a constant downward slide since the IPO.
Rumours of a larger company buying Snap are not new. Investors have been calling for management to sell for a while. Investors believed Facebook and Google were the most likely suitors, but a frosty relationship between Evan Spiegel and Facebook’s CEO Mark Zuckerberg has nearly ruled out that possibility, according to Heath. Spiegel turned down a previous offer from Zuckerberg.
Alphabet’s executive chairman Eric Schmidt and Spiegel are reportedly close. Schmidt was an early advisor to Spiegel and the relationship between the two has remained positive.
Heath says an acquisition by Google would make sense, as the company has previously tried to start a social network.
Snap’s Spiegel is reported to be very independent, and against being bought.
The market value of Snap after the jump sits around $US15.2 billion, which means Google’s potential offer would be about double what the company is currently worth.
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