Snapchat rejects $3bn offer from Facebook

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Snapchat rejects Facebook bid

Evan Spiegel, the 23-year-old founder of Snapchat, has rejected a $3bn (£1.87bn) offer from Facebook for control of the company.

The offer follows an initial bid from Facebook earlier in the year, which has been reported at around $1bn. This bid, which would have been a record purchase for the social media giant, comes shortly after the news that the price of Facebook shares had reached $45 for the first time, a new high for the company since a disappointing IPO.

Larger offer on the way?

A significant amount of interest has been reported in gaining control of Snapchat, with the extremely popular mobile app seeing around 350 million images sent on a daily basis. The Wall Street Journal reports that Chinese e-commerce giant Tencent Holdings had offered to lead an investment that would value the company at more than $4 billion (£2.5bn).

Turning down an offer of these magnitude certainly suggests that Spiegel expects an increased offer to be made for the company, either in the near future or years to come. The app was first released two years ago, with a surge in popularity in recent months as the messaging service spread to more and more users.

One of the main selling points of Snapchat is the fact that images are only shared for a short amount of time, leading users of the app to create pictures that they would not usually wish to be shared. However this security was previously breached, with an app which allowed users to save Snapchat messages. This privacy is a key part of the popularity of Snapchat, and is something the company must take great care to protect if they are to eventually be sold for a significant figure.

Kleon West, business development director at theEword, commented: "Turning down such a large figure for such a new company may seem like a risky strategy for Snapchat, but there is clearly confidence that an even larger sale can be agreed. It will be interesting to monitor the interest in Snapchat over the coming months, and whether this bid from Facebook inspires any further parties to show their hand."