Facebook, the well known social networking site, offered 500 million dollars in stock shares for the acquisition of the popular Twitter. The offer included 100 from the 500 million in cash and the remaining amount in stock shares. Twitter refused the offer for several reasons. Firstly, according to the actual Facebook estimated price and its share value, the amount of the acquisition falls to 150 million dollars since Facebook’s share vaue is over-priced in relation to its real value.
Of course these are not little money for a company which is just two years old and has no income and no business model yet, but Twitter hopes to make money from its own business model to be announced next year. Finally, Twitter investors want cash in exchange, something that Facebook does not intend to give in easily.