Yahoo, please walk away when there's still time.
Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
11–20 of 59 posts
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#12[deleted]
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#13> Tumblr feels that Yahoo’s $1.1 billion offer as “too low” and view it as “only a first offer”
And then later in the paragraph:
> sources say the company only has a few months of cash runway left.
This must be a joke. If you have a few months of cash runway left, $1.1B is more than enough. Seriously. There is no circumstance when this isn't true, unless you have massive non-cash assets on hand.
Yes, I'm aware that they could go raise more money and try to hold out for more, but let's be serious here: they make (effectively) no money and they're being offered well over a billion dollars. Billion -- with a 'B'. This sort of public posturing is just obnoxious.
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#14Surely twould be more efficient just to tell Yahoo rather than trying to bounce the message off us.
Given the nature of the Silicon Valley echo chamber, I don't think they'll have any difficulties in getting the message to Yahoo.
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#15Remember Yelp?
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#16AOL felt their pageviews for this were "Too Low".
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#17Tumblr's revenue in 2012 was $13M and negative profits (they are actually losing money).
They "expect" $100M revenue and $60M profits in 2013.
Even if their expectations work, whoever offered them $1.1B is a complete idiot.
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#18Has there ever been an acquisition similar to Tumblr (company that has existed for 5+ years that hasn't found a profitable business model) which has contributed positively to the acquirer's net income? Is there any chance that this cannot turn out to be a boondoggle, because that seems to be the consensus among the commenters on HN.
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#19If I were a Yahoo shareholder, even at a $1.1bn price tag, I would vote against the acquisition.
> Tumblr has no real revenue, let alone profit, making it a value dilutive acquisition for Yahoo.
> The acquisition price is artificially being inflated by investors who are trying to squeeze Yahoo, who is trying to "turnaround" its profitable business. The $1.1.bn price is already "too high" for Tumblr's true underlying value.
> Yahoo has no track-record of successfully acquiring, integrating and generating value from such acquisitions. Broadcast.com ($5.7bn), GeoCities ($3.6bn), Inktomi ($235m), Overture ($1.6bn), del.icio.us ($20m), Flickr ($?m), and the list goes on.
I feel sorry for Yahoo's retail investors. I guess "greed is good" when it comes to startup acquisitions.
Re: Tumblr May Reject Yahoo’s $1.1B Acquisition Offer For Being “Too Low”
#20In response to some of the critics:
For a good user-generated content comparable, YouTube wasn't profitable until around 2010-2011[1], 7 years after its founding. It is, of course, very profitable now and looks like one of the best acquisitions ever made in the internet space. Google only had to fork out $1.65Bn in an all-stock transaction for a company which would now be worth many, many times that (some numbers would say over $50Bn [assuming $5Bn income at a conservative 10x P/E],[2] I would say many times more).
Revenue is, of course, a massive lagging indicator in the software industry. I think anyone who sees Tumblr as being overvalued greatly underestimates the sheer size of their user-generated content library, especially because most popular externally-facing Tumblr sites have custom URLs which hide the true size of the network. Most regular internet users will visit Tumblr many times throughout the day without noticing it. You have to remember that its Alexa rank has been climbing non stop over the last few years, and it is now at 19 in the US with a steady pageviews/user count (which not even Facebook can claim).[3]
[1] http://www.reelseo.com/google-ceo-eric-schmidt-claims-youtub...
[2] http://www.benzinga.com/analyst-ratings/analyst-color/13/05/...