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Twitter reportedly held talks to buy Clubhouse app for $4B

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Twitter held talks to acquire Clubhouse for $4 billion, Bloomberg reported. Yahoo Finance's Julie Hyman, Brian Sozzi and Myles Udland discuss the details.

Video Transcript

JULIE HYMAN: Let's talk about another story that is out. It came out late yesterday, and there was a lot of talk about it, Bloomberg reporting that Twitter had held talks in recent months to buy Clubhouse. Now, Clubhouse is a sort of live podcast discussion app that has gotten a lot of attention. You have to get an invite to join the thing. There have been some celebrities and big CEOs like Mark Zuckerberg who have joined some discussions on it.

And the valuation that's been talked about most recently for the company is $4 billion. Now, it looks like Twitter's not talking with Clubhouse anymore, so I don't know what to make of this story. But what I also wonder about in these situations is, you know, who leaked this and why? In whose interest was it to get this out there?

Is it Clubhouse, somebody from Clubhouse or a banker from Clubhouse who wants to keep shopping this company? Is it somebody wanting to put pressure on Twitter to get them to sort of step up their game and change their strategy? I guess TBD, but I'm curious on that question.

MYLES UDLAND: Well, there was a report from Bloomberg earlier this week that Clubhouse was looking to raise money at $4 billion. And so I think it's within Twitter's interest to leak to its investors that Twitter is thinking about doing more material M&A, that, you know, they've developed Spaces which is kind of a Clubhouse rip off-- not kind of, it is a Clubhouse rip off that they're trying to develop. Twitter wants to accelerate their roadmap.

But I think as for the question of Clubhouse itself, there's-- there's no way this company is worth $4 billion. It is either worth 10, 20 times more than that or it's worth 90% less than this. $4 billion is certainly not the right value for Clubhouse. I think given the fact that the company didn't exist a year ago and now it's talking about raising money at $4 billion, it would suggest to me that Clubhouse is still significantly undervalued. But we don't have to weigh in on what the value of Clubhouse is or is not. Certainly, the value is not this. It's-- it's likely materially higher or it's-- or it's basically zero.

And the other thing about Clubhouse, and I've thought about this a lot because you see it in strategy conversations at various media companies, it's-- the app is not for the media. I think this is what the, like, traditional media is so kind of perplexed by, nonplussed by when they think about Clubhouse, what it is, what it is not, do we need to have a strategy.

The thing that's interesting about Clubhouse from people I've talked to who are not in the media is that it gives you access to big investors. It can give you access to celebrities. You have a chance-- you can raise your hand in a Clubhouse room, and there's a chance that you, random person, will get called on by some notable investor, by some notable celebrity type. And it circumvents the need for that person to appear on Yahoo Finance or on Bloomberg TV or any other potential network.

Now, media companies want a slice of this, but it's just not for the traditional media. And so I think that's why there's always a mix of, like, fascination, and some scorn, and certainly jealousy when it comes to Clubhouse. I mean, personally, it's not very interesting to me. I find myself extremely bored with the conversations I've heard on there.

But just because I find it boring doesn't necessarily mean that the service doesn't have something there. And I think a lot of it is the disconnect between the job that we all do and sort of who Clubhouse's target, both content producer and content consumer, really is. That's my opinion.

JULIE HYMAN: I think the fact that you do find it boring is an indicator, in fact, Myles. I mean, you're a regular consumer, even if you're a member of the media, just like anyone else is. I would take the under on your various valuation range that you were talking about. And I know people do get utility out of this thing and do find it interesting.

But you know, as I've seen a lot of commentary about this thing, and it also, as we mentioned, requires an invite, and if it's not just open, you have to wonder about the-- the ease of getting into it and if that's going to be an obstacle. I did see one-- one data point, as well, that our Melody Hahm shared from tech journalist Casey Newton, and even Newton sort of expressed some skepticism about these numbers. But he's got some data from Sensor Tower and said the downloads of Clubhouse in February were 9.6 million. In March, they were 2.6 million. So if it-- if there's any accuracy to those numbers at all, that indicates a big decline, obviously, in-- in sort of new buzzy interest in this thing.

BRIAN SOZZI: Well, Julie, if-- if you send me an invite to your Clubhouse chat, I'll be there. Myles, not so much. Julie, for you, I will be there.

JULIE HYMAN: Given-- given what we've been saying, I don't-- I don't think any of these things are happening, unfortunately. You'll have to get your invites elsewhere, Sozzi.