Microblogging and Social networking Site–Twitter , Inc. on Wednesday announced that it has agreed to sell MoPub, which it purchased for about $350 million in stock back in September 2013, to AppLovin Corporation (NASDAQ: APP), a major marketing software company, for $1.05 billion in cash.
With this deal, Twitter will be able to advance its owned and operated revenue products and expand into the services including performance-based advertising, small and medium-sized business (SMB) offerings, and commerce initiatives.
In a statement, Twitter said that MoPub helped the company to generate around $188 million in revenue last year. This strategic move to sell off the revenue-generating platform– that provides monetization solutions for mobile app publishers and developers around the world– is aligned with Twitter’s previously set goal of reaching $7.5 billion annual revenue by 2023.
Ned Segal, Twitter CFO says: “The sale of MoPub positions us to concentrate more of our efforts on the massive potential for ads on our website and in our apps. We plan to accelerate product development and replenish the near term revenue loss, to improve our time to market to deliver on our previously stated goal of at least doubling total annual revenue from $3.7 billion in 2020 to $7.5 billion or more in 2023.”
AppLovin shares soared more than 8% in extended trading hours on Wednesday whereas Twitter shares surged more than 2%.
On Thursday Pre-market, Twitter surged as much as 2.5%, trading at above $62.50 apiece, whereas AppLovIn ballooned as much as 8% with a high of $85.9478.
The impact of the announcement will be observed on the dashboard of Quantale as the day proceeds. For Wednesday, Twitter’s social engagement amongst the users of Twitter and Reddit fell almost 74 percent combined with a fall of nearly 8 percent in the trading volume.
10.70 million shares of the stock exchanged hands, 1.04 million above the average of 11.74 million.
Twitter’s stock opened its intraday at $62.0, up 1.48 % from the previous day’s close of $61.29.
On the other hand, NASDAQ listed stock– AppLovIn opened at a gap up, at $82.63. Just within the minutes of opening of normal trading hours, the stock jumped almost 9% trading at $83 above.
Jack Dorsey, Twitter CEO in a statement said, “This transaction increases our focus and demonstrates confidence in our revenue product roadmap, accelerating our ability to invest in the core products that position Twitter for long-term growth and best serve the public conversation. We thank the incredible teams and customers who have contributed to making MoPub a success within Twitter over the years.”
MoPub facilitates 55,000 apps and 130 DSPs globally, servicing over 1 trillion app advertisement requests in a month and outstretching to over 1.4 billion unique devices, as per its official website.
The formalities of the deal will be completed by next year.
“We are excited by the opportunity to grow the AppLovin platform and further enhance our publisher monetization tools through this strategic transaction,” said AppLovin CEO Adam Foroughi in a statement. “We welcome the MoPub team and together we will work diligently to combine the best of MoPub into the AppLovin software platform.”
AppLovin sees this deal as a gateway to yield a robust solution for mobile app publishers through increased sales via more demand, and access to more customers through mobile advertisers.
Headquartered in Palo Alto, California, AppLovIn was founded in 2011 by Adam Foroughi, John Krystynak, Andrew Karam to help mobile apps get discovered and generate revenue. In 2018, KKR poured in funds worth $2 billion to help the firm expand its business into game development, largely via acquisitions. AppLovin has a market cap of almost $29 billion as of Wednesday’s close.
“The Company will provide additional details regarding the estimated future financial impact when it reports financial results for the third quarter on October 26, 2021, after market close,” said Twitter in its release.