Huge waste of money is more like it. Call me an old-fashioned businessman, but $2 billion in rev still sucks when the end result is a $500MM loss. Even at that scale, $500MM is no small gap to close, especially when your primary competitors are wildly superior and better platforms for your core business are emerging all of the time (snapchat, for instance).
Scaling up a weak business to epic heights doesn't magically make it a success for shareholders. Initial investors, sure.
Two billion in revenue is a lot less impressive when you consider that they spent half a billion more than that in the process.
Generally, people like their businesses to reliably turn $1 into $2 over time, not turn $2.50 into $2 over and over.
Particularly if what you do with the other $0.50 is build something that's only valuable because of the group behavior of a few billion fickle users who will almost certainly desert you at some point in the future for something newer and shinier.
Maybe the tax losses would be worth something, but I don't consider it likely someone to pay $15.2bn for Twitter. Heck, even $5bn is still a lot of money to pay for a business that's losing $500mm a year.
Could you fire two thirds of all the staff and make it profitable?
I should add that when I said "overgrown startup," the implication wasn't that it's a small company. I'm saying that they've operated at a loss for all of their existence (like many SV startups) and never turned that around. Scaling while failing, and they hoped that another round of investment (IPO) would give them time to change that.
