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

2456

Comments

  • Reply 21 of 104
    mstonemstone Posts: 11,510member
    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.

  • Reply 22 of 104
    Paid $16B to eliminate a threat..
  • Reply 23 of 104
    ash471ash471 Posts: 705member
    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. 

  • Reply 24 of 104
    irelandireland Posts: 17,620member

    Sooner or later Zuck is going to prove his fallibility.

  • Reply 25 of 104
    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.

  • Reply 26 of 104
    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.

  • Reply 27 of 104
    ash471ash471 Posts: 705member
    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. 

  • Reply 28 of 104
    rogifanrogifan Posts: 10,669member
    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). :rolleyes:
  • Reply 29 of 104
    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.

  • Reply 30 of 104
    ash471ash471 Posts: 705member
    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.  

  • Reply 31 of 104
    philboogie wrote: »
    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.
    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
  • Reply 32 of 104
    ash471ash471 Posts: 705member
    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. 

  • Reply 33 of 104
    MarvinMarvin Posts: 14,223moderator
    rogifan wrote: »
    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.
  • Reply 34 of 104
    mstonemstone Posts: 11,510member
    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.

  • Reply 35 of 104
    jungmarkjungmark Posts: 6,705member
    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?
  • Reply 36 of 104

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

  • Reply 37 of 104
    snovasnova Posts: 1,281member
    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. 
  • Reply 38 of 104
    sflocalsflocal Posts: 4,652member
    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?



    Funny thing is that some of my friends were using WhatsApp because they hate Facebook.  I'm going to crack up laughing when I tell him the news. :)

     

    What's going to happen like everything else in the past, they over-pay for a company, everyone (or most) will jettison the app and move on to the next one.. rinse and repeat.  This deal is going to go south within a year.

  • Reply 39 of 104
    snova wrote: »
    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. 

    They wrote on their blog the following:

    Almost five years ago we started WhatsApp with a simple mission: building a cool product used globally by everybody. Nothing else mattered to us.

    Today we are announcing a partnership with Facebook that will allow us to continue on that simple mission. Doing this will give WhatsApp the flexibility to grow and expand, while giving me, Brian, and the rest of our team more time to focus on building a communications service that’s as fast, affordable and personal as possible.

    Here’s what will change for you, our users: nothing.

    WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication. There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.

    On a personal note, Brian and I couldn’t be more proud to be part of a small team of people who, in just under five years, built a communication service that now supports over 450 million monthly active users worldwide and over 320 million daily active users. They have helped re-define and revolutionize communication for the 21st century, and we couldn’t be more grateful.

    Our team has always believed that neither cost and distance should ever prevent people from connecting with their friends and loved ones, and won’t rest until everyone, everywhere is empowered with that opportunity. We want to thank all of our users and everybody in our lives for making this next chapter possible, and for joining us as we continue on this very special journey.
  • Reply 40 of 104
    Quote:
    Originally Posted by PhilBoogie View Post



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

    That's a contingent payment.

     

    It really should've valued at 4 + 12 + Call Option Value (of a four-year option with exercise price equal to the vesting price).

Sign In or Register to comment.