Facebook to Buy Messaging Start-Up in $16 Billion Deal

[jsr]

Last edited Wed Feb 19, 2014, 09:05 PM - Edit history (1)

Source: New York Times

Facebook said on Wednesday that it would acquire WhatsApp, a messaging start-up, for $16 billion in cash and stock.

The eye-popping price is Facebook’s largest acquisition by far and marks a new height in the frenzy to acquire popular technology start-ups.

Facebook will pay $4 billion in cash and $12 billion worth of Facebook shares for WhatsApp. An additional $3 billion in restricted stock units will be granted to WhatsApp employees and founders. These units will vest over the next four years.

“WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable,” Mark Zuckerberg, Facebook’s founder and chief executive, said in a statement. “I’ve known Jan for a long time and I’m excited to partner with him and his team to make the world more open and connected,” he added referring to Jan Koum, WhatsApp co-founder and chief executive

Read more: http://dealbook.nytimes.com/2014/02/19/facebook-to-buy-messaging-start-up/

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"They trust me — dumb fucks." - Mark Zuckerberg.

[tomm2thumbs]

1. I have a few things I need to sell for 16 billion.. (looking through boxes) now where is that hat...

hehehehe

[Kelvin Mace]

2. Anybody accepting FB stock

is an idiot.

Face is going to crash and burn a LOT of people.

&feature=c4-overview&list=UUHnyfMqiRRG1u-2MsSQLbXA

[displacedtexan]

3. I think you're right.

I'd take that chunk of cash, though, and buy an island. I wonder how many people have to split that 4 billion.

[AgingAmerican]

5. Well, there is that four billion in cash

nt

[Kelvin Mace]

7. Yep,

cash on the barrel head should be your guide.

[BlueStreak]

13. Exactly. And there are a bunch of punks on Wall Street who have never seen a down market

For many of them, their entire "investing" experience came during the period when the Fed has been flooding the economy with cash that nobody really wanted or needed. So it just drained into the stock market and propped up ridiculous stocks like Facebook.

Facebook is trading at over 100 year's worth of earnings whereas a normal company trades at maybe 15 years' worth of earnings. Raise your hand if you believe Facebook is going to be around 100 years from now.

Hell, raise your hand if you think Facebook is going to be a thing in 2020.

The only way that stock price makes a lick of sense is if you believe that Facebook will be able to "grow into" that price by sustaining an astronomical rate of earnings growth. But kids have already moved on -- Facebook is so 2012. Facebook is now where old people go to find out who died. Once advertisers catch up with that reality, Facebook will hit the wall.

But reality seems to be a couple of years behind. I have been doing option straddles on Facebook. The price keeps going up, but I know there will be a day when it comes crashing down. I make a little money on the upside move, but I will make a pot of money if there is a big crash. I'm betting on it.

[BlueStreak]

14. Thanks for that video. Facebook is a fraud and this starts to pull the curtains open

This is headed for a spectacular flame-out. I don't know it it will happen in 6 months or in 2 years, but it is going to happen.

[Jesus Malverde]

4. suckerberg

Who has heard of whatsapp?

He's trying to pretend it's hot like snap chat that told him to take a hike..

The fact the hottest social media is ephemeral must really bother him.

I sense desperation.

Fewer and fewer people are logging into Facebook and even fewer are sharing. The daily NSA stories really blow the buzz of the anonymity banning social services.

[Xithras]

6. Uh....a LOT of people use WhatsApp

I've heard people draw parallels between WhatsApp/SnapChat and FaceBook/MySpace.

SnapChat is where all the bored teenagers hang out. WhatsApp appeals to a much broader group of users and has more international users.

A quick search shows that WhatsApp is used to transmit 350 million images a day. Snapchat is about 200 million.

I have both. I use WhatsApp all the time with lots of people. I only use Snapchat with my 17 year old son.

[Jesus Malverde]

8. Lets hope they don't grow the service like friend feed.

Whatsapp has great reviews at the app store.

It looks like I do most all that with sms.

[Xithras]

9. WhatsApp has a few advantages over SMS

It has lots of little tools for group calling and messaging, is much faster at transmitting images and video, and supports features like Voice Messaging that aren't supported by SMS at all. Most people also don't have unlimited SMS plans and they can be quite expensive in some parts of the world. But the real advantage...and the reason that it has exploded internationally... is that SMS is carrier based, so you often won't get your SMS messages if you are travelling and roaming off-network. With WhatsApp, as long as you have a data connection or access to a wifi hotspot, you can get your messages.

[Jesus Malverde]

10. Interesting...

I know "Line" is popular in Japan. I think for similar reasons.

Thanks for your informative reply.

[DavidDvorkin]

11. I use WhatsApp

A German friend and I use it for free international texting.

[jsr]

12. Zuckerberg is buying 450 million cellphone numbers and their address books