Twitter reveals $533 million price tag for TellApart

When Twitter announced Tuesday that it struck a deal to buy the Burlingame marketing company TellApart, the company didn’t reveal the price tag of the purchase that day.

It turns out to be a large one.

Twitter agreed to pay up to $533 million in stock to buy TellApart, the company disclosed in a form filed to the Securities and Exchange Commission on Wednesday. The company is issuing 2.6 million shares at a price of $42.27 per share, which was based on Tuesday’s closing price.

Twitter’s first-quarter earnings shocked Wall Street twice Tuesday after Nasdaq released the lower-than-expected results on its investor website an hour before the market closed. Twitter then asked the New York Stock Exchange to suspend trading, but by the time it resumed shares continued falling, closing down about 18 percent, at $42.27.

For some analysts, the fact that Twitter didn’t mention the price of the TellApart purchase on its earnings call was yet another surprise.

“We think the size and significance further weighs on management and would not be surprised to see shareholder frustration voiced about execution and disclosure,” wrote Bob Peck, an analyst for SunTrust Robinson Humphrey in a note today.

Twitter reported sales between January and March of $435.9 million, which was lower than the $456.82 million in revenue that Wall Street expected. Company executives said that they didn’t bring in as many dollars from advertisements that prompts users to directly take an action such as downloading an app or filling out a form.

The purchase of TellApart, which Twitter said will help advertisers better reach customers on multiple devices, is expected to close on or around June 1.

Photo Credit: Laura A. Oda/Bay Area News Group

 

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