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Facebook to buy messaging app WhatsApp for $16B plus $3B in RSUs

post #1 of 105
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Facebook on Wednesday announced its intentions to acquire popular messaging app WhatsApp in an initial cash and stock deal worth some $16 billion, not including an additional $3 billion provision for restricted stock units.

Facebook WhatsApp


According to Facebook, the social media giant said it plans to purchase mobile messaging firm WhatsApp with $4 billion in cash and approximately $12 billion worth of Facebook shares. Additionally, a provision provides for a $3 billion payout in restricted stock units to be granted to WhatsApp founders and employees. The RSUs will vest in four years after the deal closes.

"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Facebook founder and CEO Mark Zuckerberg in a prepared statement. "I've known [WhatsApp founder Jan Koum] for a long time and I'm excited to partner with him and his team to make the world more open and connected."

WhatsApp's brand will be maintained, as will its headquarters in Mountain View, Calif. After completion of the acquisition, Koum will take a seat at Facebook's Board of Directors.

Facebook said it will keep the cross-platform messaging app an independent entity and run the service much like the current implementation of Instagram. It remains unclear how the acquisition will affect WhatsApp's "mantra" of an ad-free experience, especially as Facebook becomes increasingly aggressive in leveraging the scope of its platform for such money-making activities.

Also unknown is what the buy means for WhatsApp's pricing structure, which currently stands at a yearly $0.99 fee for unlimited usage. The app was free when it debuted in the iOS App Store, but the company chose to institute the annual charge to keep the service ad-free under a crush of new users.

The major acquisition more than hints at a strong push in advancing Facebook's messaging service, Facebook Messenger, which is also widely used, but has been eclipsed by third-party services that offer a more user-friendly and connected experience. For now, however, WhatsApp and Facebook Messenger will remain separate standalone apps.

While WhatsApp touts a massive installed worldwide user base, Facebook is making definite inroads into Europe, where the messaging app is very popular.
post #2 of 105
Will they get access to the history of my messaging? Because this I would not like, and I will hit the 'Clear All Conversations' button right this minute.
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post #3 of 105
$16 billion!?! OMFG!!
post #4 of 105
Quote:
Originally Posted by leavingthebigG View Post

$16 billion!?! OMFG!!

Read the article; it's only $4B in cash. The other $15B is FB stock.
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post #5 of 105

Not going to help.."Clear all conversations" clears the GUI.The transcripts remain on serverside because regulations stipulate that they have to.Actually Snapchat was in a controversy for the very same reason.They keep all the photos for a over a year even though to the user it expires in 10 secs

post #6 of 105
The fed is behind this bull****. FB could just copy the app but noooooooo.... They are shelling out 4 billion big ones for one of thousands of millennial crap apps.
Suckas!
post #7 of 105

There's another tech stock crash coming...........

post #8 of 105

Between Facebook and Google, there are now a fair few apps no one should ever use anymore…

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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post #9 of 105
Quote:
Originally Posted by PhilBoogie View Post

Will they get access to the history of my messaging? Because this I would not like, and I will hit the 'Clear All Conversations' button right this minute.

edit:
Looks like they don't keep your info by default, if they tell the truth:
http://www.whatsapp.com/faq/en/iphone/20888066
Quote:
Since your WhatsApp conversation history is not stored on our servers, we cannot retrieve any deleted messages for you. In WhatsApp version 2.10.1 and later, you can use our iCloud backup feature to back up and restore your chat history.
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post #10 of 105

I came back from Germany a few weeks ago.  My friends there were all using WhatsApp on their iPhones.  What was funny is that when I explained to them what iMessage does (including FaceTime Audio), they all said they had no idea the iPhone works that way so they all jettisoned WhatsApp.  In addition, I trust Apple to keep my contact info secure versus have some 3rd-party company have access to my contact info.

That being said $16B for what is essentially a glorified text-message app is just insane.  Whether cash or stock, it's still a stupid amount to pay.  I see a Motorola debacle happening when this is all done.

Lucky founders though.  I'd be cashing out as much as I could when the time allows.  There's no way that company would be worth that much in what I call "reality".

post #11 of 105
Quote:
Originally Posted by PhilBoogie View Post


Read the article; it's only $4B in cash. The other $15B is FB stock.

PhilBoogie,

 

For me 4 + 12 = 16. It may be different for you.

 

Which part of, "Facebook to buy messaging app WhatsApp for $16B", did you actually miss in the title AND in the article? It does not matter if Facebook is paying $4B in cash and $12B in stock. The amount still adds to $16B.

 

The next time you choose to stupidly respond to one of my posts, don't.

post #12 of 105
Quote:
Originally Posted by PhilBoogie View Post

Read the article; it's only $4B in cash. The other $15B is FB stock.

Yeah, right. Stock isn't real money.
If you agree, just give me $12B in FB stock. I'm sure FB stockholders won't mind either.
post #13 of 105
Quote:
Originally Posted by sflocal View Post

I came back from Germany a few weeks ago.  My friends there were all using WhatsApp on their iPhones.  What was funny is that when I explained to them what iMessage does (including FaceTime Audio), they all said they had no idea the iPhone works that way so they all jettisoned WhatsApp.  In addition, I trust Apple to keep my contact info secure versus have some 3rd-party company have access to my contact info.


That being said $16B for what is essentially a glorified text-message app is just insane.  Whether cash or stock, it's still a stupid amount to pay.  I see a Motorola debacle happening when this is all done.


Lucky founders though.  I'd be cashing out as much as I could when the time allows.  There's no way that company would be worth that much in what I call "reality".
I see comments on the Engadget defending this price saying FB is paying for the users. Even still are whatsapp users really worth $50 a pop?
post #14 of 105
Quote:
Originally Posted by leavingthebigG View Post

Quote:
Originally Posted by PhilBoogie View Post

Read the article; it's only $4B in cash. The other $15B is FB stock.
PhilBoogie,

For me 4 + 12 = 16. It may be different for you.

Which part of, "Facebook to buy messaging app WhatsApp for $16B", did you actually miss in the title AND in the article? It does not matter if Facebook is paying $4B in cash and $12B in stock. The amount still adds to $16B.

You're overlooking the $3B in restricted stock, from the article, as well as the title:
Quote:
According to Facebook, the social media giant said it plans to purchase mobile messaging firm WhatsApp with $4 billion in cash and approximately $12 billion worth of Facebook shares. Additionally, a provision provides for a $3 billion payout in restricted stock units to be granted to WhatsApp founders and employees.
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post #15 of 105
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Originally Posted by PaulMJohnson View Post
 

There's another tech stock crash coming...........

Hopefully it will not be an Apple stock crash! With the way analysts and bloggers LOVE to trash Apple for spending gobs of money, there many be an avalanche of articles starting tonight trashing Apple for not buying WhatApp before Facebook.

 

I still cannot wrap my head around this $16B purchase for a messaging app!

post #16 of 105

I agree... Dotcom Crash 2.0 is well on the way. The first one was so full of idiots it looked inevitable. The next one will at least have the effect of clearing out the detritus.

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GOA

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GOA

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post #17 of 105
Quote:
Originally Posted by PhilBoogie View Post


You're overlooking the $3B in restricted stock, from the article, as well as the title:

I did not overlook the $3B in restricted stock. I do not know what is written in the provision. Do you? No guesses.

post #18 of 105
Quote:
Originally Posted by leavingthebigG View Post
 

Hopefully it will not be an Apple stock crash! With the way analysts and bloggers LOVE to trash Apple for spending gobs of money, there many be an avalanche of articles starting tonight trashing Apple for not buying WhatApp before Facebook.

 

I still cannot wrap my head around this $16B purchase for a messaging app!

When a crash comes, the companies that actually make money tend to hold up OK.

 

Companies like Facebook, with a P/E of 110 will struggle.  

 

Zynga with a market cap of $4.22bn despite never having posted a profit will struggle.

 

I heard someone suggest a Spotify IPO could value them at $24bn.  They are losing money.

 

Amazon with a P/E of 590.  How can that be justified?  They can't keep growing forever......

 

Apple with a P/E of 13 and actual profits will be OK.

 

Microsoft with a P/E of 14 and actual profits will be OK.

 

Eventually, sanity will be restored and investors will realize that you invest in companies because they are going to make money commensurate with the price of them.

post #19 of 105
Quote:
Originally Posted by sflocal View Post
 

I came back from Germany a few weeks ago.  My friends there were all using WhatsApp on their iPhones.  What was funny is that when I explained to them what iMessage does (including FaceTime Audio), they all said they had no idea the iPhone works that way so they all jettisoned WhatsApp.  In addition, I trust Apple to keep my contact info secure versus have some 3rd-party company have access to my contact info.

That being said $16B for what is essentially a glorified text-message app is just insane.  Whether cash or stock, it's still a stupid amount to pay.  I see a Motorola debacle happening when this is all done.

Lucky founders though.  I'd be cashing out as much as I could when the time allows.  There's no way that company would be worth that much in what I call "reality".

What did your friends think the Messages app that comes with the phone did?

post #20 of 105
SnapChat should have taken the multi-billion offer from Facebook. That door is now closed.

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post #21 of 105
Quote:
Originally Posted by leavingthebigG View Post

Quote:
Originally Posted by PhilBoogie View Post

You're overlooking the $3B in restricted stock, from the article, as well as the title:
I did not overlook the $3B in restricted stock. I do not know what is written in the provision. Do you? No guesses.

MENLO PARK, CALIF. – February 19, 2014 – Facebook today announced that it has reached a definitive agreement to acquire WhatsApp, a rapidly growing cross-platform mobile messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.

source: FB

Wouldn't that turn out to be 4 + 12 + 3 = 19?
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post #22 of 105
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Originally Posted by jd_in_sb View Post

SnapChat should have taken the multi-billion offer from Facebook. That door is now closed.

Especially with their latest security breach.

post #23 of 105

I trust Zuckerberg more than Page! ;)

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....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

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post #24 of 105
Quote:
Originally Posted by leavingthebigG View Post
 
 It does not matter if Facebook is paying $4B in cash and $12B in stock. The amount still adds to $16B.

Could be more, could be less. It really depends on what FB stock does. I'm sure they can't sell their stock for a long time.

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post #25 of 105
Paid $16B to eliminate a threat..
post #26 of 105
Quote:
Originally Posted by SpamSandwich View Post
 

I agree... Dotcom Crash 2.0 is well on the way. The first one was so full of idiots it looked inevitable. The next one will at least have the effect of clearing out the detritus.

I don't see this purchase as any indication of something wrong in the overall market.  This is just a stupid move by Zuckerberg.  He thinks because he rolled the dice once and got lucky with Instagram that the same thing is going to happen this time.  He's an idiot. $16B is a lot more than $1B and instant messaging isn't as core to the FB business as social networking photos. Also, these users are in low value places in the world.  It is one thing to pay $1B for US user base and another thing to pay $16B for foreign user base. 

post #27 of 105

Sooner or later Zuck is going to prove his fallibility.

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post #28 of 105
Quote:
Originally Posted by PhilBoogie View Post


MENLO PARK, CALIF. – February 19, 2014 – Facebook today announced that it has reached a definitive agreement to acquire WhatsApp, a rapidly growing cross-platform mobile messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.

source: FB

Wouldn't that turn out to be 4 + 12 + 3 = 19?

Take another read of this article then let me know if it has changed since you first read it.

post #29 of 105
Quote:
Originally Posted by PhilBoogie View Post


Read the article; it's only $4B in cash. The other $15B is FB stock.

 

Only? It's an effing messaging company. Gawd damn this is another example of inflated self-worth.

post #30 of 105
Quote:
Originally Posted by mstone View Post
 

Could be more, could be less. It really depends on what FB stock does. I'm sure they can't sell their stock for a long time.

$15B in stock might be big enough to move the needle even if all of it were restricted (which its not).

The more fundamental question is "how does FB get a return on investment?"   Someone suggested WhatsApp is a threat.  I don't use WhatsApp, but I'm not seeing how its a threat to FB. 


Edited by ash471 - 2/19/14 at 3:58pm
post #31 of 105
Quote:
WSJD (@WSJD) tweeted at 5:32pm - 19 Feb 14:

“Monetization is not going to be a priority for us,” said WhatsApp CEO. “We’re focused on the growth.” on.wsj.com/1d1FjrA $FB (https://twitter.com/WSJD/status/436282136526471168)

And people still claim there is no tech bubble (outside of Apple, of course). 1rolleyes.gif
post #32 of 105
Quote:
Originally Posted by Rogifan View Post

I see comments on the Engadget defending this price saying FB is paying for the users. Even still are whatsapp users really worth $50 a pop?

 

$50 each is a lot, for a bunch of IM users.  Is there no overlap? How many of these WhatsApp users are already FB users?  Also, WhatsApp is also an android app, and we know how much android users pay for stuff.... yeah, smart move to acquire those customers.  LOL

 

Also, the WhatsApp website has a big paragraph entitled "Why we don't sell ads".  I suppose that policy is about to change.  Or, maybe not... maybe they'll just siphon off all your info to FB, and sell it to their advertisers.  Here comes the email spam... 

 

I'm so very glad I don't use FB.

post #33 of 105
Quote:
Originally Posted by Disturbia View Post
 

I trust Zuckerberg more than Page! ;)

Really?  Why?

At least Larry Page made the world a better place.  I use Google everyday and I think I'm more knowledgable and effective as a human being because of it. In contrast, fanatic users of Facebook are often worse people because of their Facebook habit.  

post #34 of 105
Quote:
Originally Posted by leavingthebigG View Post

Quote:
Originally Posted by PhilBoogie View Post

Take another read of this article then let me know if it has changed since you first read it.

You mean the keyword 'including' refers to the later on mentioned $3B in additional stock? Strange way of using words, then again, English is a language I'll never understand properly.
Quote:
Originally Posted by mdriftmeyer View Post

Only? It's an effing messaging company. Gawd damn this is another example of inflated self-worth.

$4B is obviously a ridiculous amount for this service, but I guess the widespread use is what sets it so high. I should've typed the 'only' in italic or something
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post #35 of 105
Quote:
Originally Posted by TeaEarleGreyHot View Post
 

 

$50 each is a lot, for a bunch of IM users.  Is there no overlap? How many of these WhatsApp users are already FB users?  Also, WhatsApp is also an android app, and we know how much android users pay for stuff.... yeah, smart move to acquire those customers.  LOL

 

Also, the WhatsApp website has a big paragraph entitled "Why we don't sell ads".  I suppose that policy is about to change.  Or, maybe not... maybe they'll just siphon off all your info to FB, and sell it to their advertisers.  Here comes the email spam... 

 

I'm so very glad I don't use FB.

What information does IM use provide to FB that is so much better than what it gets from FB? I'm really struggling to see the rationale for buying an IM service.  And to pay $50/user when the revenue is $.99/user is truly puzzling.  I'm starting to wonder if I'm missing something because this purchase looks beyond stupid. 

post #36 of 105
Quote:
Originally Posted by Rogifan View Post

I see comments on the Engadget defending this price saying FB is paying for the users. Even still are whatsapp users really worth $50 a pop?

Facebook has a market cap of $173b for 1.2b users. If Facebook users are worth $144 each and they can monetize 450m WhatsApp users the same way, that would suggest the company is worth $65b to them. In real-world terms, Facebook made $1.56b net income Q4 2013 from their current users:

http://www.ibtimes.com/facebook-fb-earnings-q4-2013-social-network-beats-optimistic-wall-street-predictions-1551048

The WhatsApp userbase could push that up 20% = $300m. That's every quarter. Now, they don't have to pay off $16b, the Facebook stock transfer won't affect the company at all. All they need to recoup is the cash to make it worthwhile but at $300m per quarter and assuming no income growth, that would only take just over 3 years.
post #37 of 105
Quote:
Originally Posted by Marvin View Post

Facebook has a market cap of $173b for 1.2b users. If Facebook users are worth $144 each and they can monetize 450m WhatsApp users the same way, that would suggest the company is worth $65b to them. In real-world terms, Facebook made $1.56b net income Q4 2013 from their current users:
 

Once they merge and purge, FB will find out how many Whatsapp users are already FB users.

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post #38 of 105
Quote:
Originally Posted by leavingthebigG View Post

PhilBoogie,

For me 4 + 12 = 16. It may be different for you.

Which part of, "Facebook to buy messaging app WhatsApp for $16B", did you actually miss in the title AND in the article? It does not matter if Facebook is paying $4B in cash and $12B in stock. The amount still adds to $16B.

Overrated. Did the Google guy that brokered the Moto acquisition move to Facebook?
post #39 of 105

The Motorola and Nest deals are starting to look downright cheap.

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post #40 of 105
Quote:
Originally Posted by mstone View Post
 
Quote:
Originally Posted by Marvin View Post

Facebook has a market cap of $173b for 1.2b users. If Facebook users are worth $144 each and they can monetize 450m WhatsApp users the same way, that would suggest the company is worth $65b to them. In real-world terms, Facebook made $1.56b net income Q4 2013 from their current users:
 

Once they merge and purge, FB will find out how many Whatsapp users are already FB users.

FB phone did not work. FB messenger did not work either.   What makes FB think people want their communications to be captured by FB?
glad I never bought into Whatsapp, if I had I'd be finding myself a different way to IM. 
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