On Wednesday Facebook (FB) stunned the markets by announcing it would acquire mobile messaging company WhatsApp for $19 billion in cash and stock. The price tag seems enormous for an app maker that has no income and operates in a brutally competitive and fast changing market. Given my limited knowledge of the technology sector, this article will not specifically comment on the wisdom of the acquisition. However, this quick blog post can help investors get their head around what $19 billion can buy in proven and productive assets.
Below is a quick list of stuff currently trading at an approximate enterprise value (market cap + debt - cash) of $19 billion or less.
- 93 power plants (natural gas and geothermal) generating over 28,000 MW of electricity - Calpine (CPN) operates one of the largest, youngest (average age 13 years), and cleanest fleets of power plants in the United States. $18.5 billion
- 3900 hotels in 72 countries - Marriott Hotels (MAR) offers quality lodging under 18 different brand names. $19 billion
- 100 million ounces of proven gold reserves on 29,000 square miles of land - Newmont Mining (NEM) has operations in the US, Australia, and South America. $17 billion
- 550 Boeing 737's - Southwest Airlines (LUV), a fabulously run company with a lot of planes. $13.5 billion
- Campbell's Soup, Pepperidge Farm, Goldfish, V8, Pace, Prego, Swanson - All these brands fall under the Campbell's Soup Company (CPB). $18 billion
- Victoria's Secret, Bath and Body Works, PINK, Yankee Candle - L Brands (LB) has over 3000 stores of some of the best brand names in retail. $19 billion
- M&T Bank (MTB) - 17th largest bank in the United States with $125 billion in assets. $14.5 billion.
- Carl Icahn - Icahn Enterprises (IEP) is a Master Limited Partnership through which Carl does his activism and holds most of his investments. $13 billion.
Hopefully this helps you wrap your arms around just what $19 billion can buy.