Twitter has backed out of talks to acquire the popular German music-streaming service SoundCloud.
Why? Because “the numbers didn’t add up”, reports The Wall Street Journal.
The buyout, which would have cost Twitter north of $700 million based on SoundCloud’s most recent valuation, didn’t make sense on paper. Likely, Twitter was looking for another entry into the music business, and SoundCloud’s 250 million plus active users probably appealed, too, as there would have been a lot of demographic crossover.
But the price was evidently too much to pay. And some are seeing this as good news for SoundCloud.
“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.”
(Source: Wall Street Journal.)
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