Seeking Alpha

Facebook buying WhatsApp

  • Facebook (FB) is acquiring mobile messaging leader WhatsApp for a whopping $16B in cash and stock.
  • WhatsApp, long seen as an indirect threat to Facebook's mobile engagement rates, had 430M monthly active users as of last month. Facebook, by comparison, ended Q4 with 1.23B MAUs and 945M mobile MAUs.
  • FB -3.7% AH.
  • Update: Facebook states in the PR the deal will also include $3B worth of restricted stock units that vest over four years, leading to a total potential payout of $19B.
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Comments (124)
  • Abu Bakr Hussain
    , contributor
    Comments (596) | Send Message
     
    Wow - the mind boggles at that price.
    19 Feb, 05:11 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8661) | Send Message
     
    Welcome to late 1999!!

     

    (QQQ) JAN16 $90 puts are a bargain @ ~$10.15.
    19 Feb, 05:38 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1971) | Send Message
     
    Insanity...
    19 Feb, 05:44 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1202) | Send Message
     
    Deep:
    imho, things are somewhat different. In 1999, practically EVERY tech stock was way overvalued. Today, I think the insane valuations are somewhat more concentrated .. social media, cloud, etc. While there is debate about valuations of MSFT, INTC, CSCO, ORCL and other "old" tech megacaps, I don't see many saying they are several multiples or let along orders of magnitude overpriced.

     

    And given that the Q's are still heavy on old megacaps ( including AAPL ), I'm not convinced this is the best play.
    19 Feb, 05:59 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    You weren't trading in 1999 (I was) if you think now is anything like then.
    In 1999 almost no tech company had any earning or even earnings on the horizon. In fact many of those companies we traded no longer exist.
    GOOG, AAPL, FB, YHOO, etc... actually have earnings and 3 of those 4
    have realistic PE's. It is different now and I cringe whenever folks compare now to then
    19 Feb, 06:22 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8661) | Send Message
     
    Fair point, ReligiousWacko, perhaps a bear call spread is in order...
    19 Feb, 08:44 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8661) | Send Message
     
    Microsoft, IBM, Intel and many, many others did indeed have earnings in 1999.

     

    Funny thing is back then warning that 1999 was like 1972 (Nifty Fifty) would have received a similar response as yours, 22643611.
    19 Feb, 08:47 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    MSFT had a PE of 79 in 99', Intel and IBM while tech stocks were computer makers as opposed to internet high flyers.
    I still remember the day YHOO hit $500 and if I recall they had
    no earnings (not positive on that).
    Anyways I see your point and time will tell if there are true similarities.
    If so then a major correction in the tech sector will take place.
    Sure there are some internet high flyers with outlandish PE's and I admit that FB's PE is very high but they are clearly the 800 lb. gorilla
    of social media and I don't think they got there by having no vision.
    19 Feb, 09:34 PM Reply Like
  • The Last Boomer
    , contributor
    Comments (900) | Send Message
     
    and how much are the Whatsapp earnings?
    19 Feb, 09:48 PM Reply Like
  • bennythebull
    , contributor
    Comments (76) | Send Message
     
    Mark keeps making major purchases that seem to be wild but this is a great purchase ,they would not say this in the webcast but 25% of whatsapp is india which is great,this stock needed this purchase to bring it through 100 ,instagram proves that they know what there doing. Whatsapp has more value than twitter,and fb is buying it for under 20b.
    The street will digest this news and the stock will be 75 withing 2 weeks. Thank you
    19 Feb, 11:15 PM Reply Like
  • jack brown
    , contributor
    Comment (1) | Send Message
     
    Couldn't they have just offered their users $20 each for their phone numbers, and saved a lot of money?
    19 Feb, 11:17 PM Reply Like
  • monsieurmarket
    , contributor
    Comments (266) | Send Message
     
    as much as FaceBook's... zilch!
    20 Feb, 02:16 AM Reply Like
  • Ananthan Thangavel
    , contributor
    Comments (836) | Send Message
     
    Could be a boon for BBRY as BBM is a cheap competitor. If BBM is worth 1/10th, then BBM worth $1.6 billion. That's over 30% of BBRY's current market cap.
    19 Feb, 05:12 PM Reply Like
  • cereal
    , contributor
    Comments (745) | Send Message
     
    Blackberry is losing subscribers (to WhatsApp no less), it starts slowly, then it just crashes.
    19 Feb, 11:42 PM Reply Like
  • seekingthetrooth
    , contributor
    Comments (645) | Send Message
     
    Mistruth and not based on fact.
    20 Feb, 03:51 AM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    I cant wait to hear Facebook bulls try to spin this as a positive value acquisition.
    19 Feb, 05:15 PM Reply Like
  • Bigisbetter
    , contributor
    Comments (591) | Send Message
     
    NO NEED TO BE BULLS, BUT THOSE WHO DONT VIEW THIS AS POSITIVE ARE RIDICULOUSLY CONSERVATIVE.pAYING FOR A STOCK WITH STOCK, OVERVALUED (TOTALLY) STOCK IS REALLY SMART, A REALLY SMART MOVE.

     

    FB has positively eliminated any threat to FB. What were users doing---using whats app instead. Instantaneous. Chat. Every posible potential for the future. Revenue could come as easy as they want. FB has all customers already, and they would really would want to get to whats app.

     

    I see huge potential.

     

    More: Apple buying TSLA? Investors loved it. What would Apple have to pay_ Something like 70 billion. Maybe more.
    19 Feb, 07:05 PM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    I'm sorry, is your argument that the stock is "OVERVALUED (TOTALLY)" or that the stock is going to go up? Even if the stock was worth $0, $4B is still a ridiculously absurd price to pay for Whatsapp. Your claim that the paper is basically worthless does not exactly inspire me to go long Facebook.
    20 Feb, 08:39 AM Reply Like
  • longday_trader
    , contributor
    Comments (55) | Send Message
     
    Some speculated that a purchase could come with a 2-3 billion price tag. But 16? The overseas mobile market is worth that much?
    19 Feb, 05:15 PM Reply Like
  • FB lover
    , contributor
    Comments (2) | Send Message
     
    4+3...right not to consider the shares that will remain in FB hand anyway
    20 Feb, 05:04 AM Reply Like
  • smart_investoor
    , contributor
    Comments (207) | Send Message
     
    16 B? Holy cow
    19 Feb, 05:19 PM Reply Like
  • positivethoughts
    , contributor
    Comments (1927) | Send Message
     
    Well, facebook paid 1/10th of their market cap for a company that has 1/3 the users. It is not that bad of a valuation considering all the young people that use whatsapp and all the integration that can take place between Facebook and whatsapp users.

     

    One of Facebook's biggest problems is that young users are migrating away or not signing up for their service in the first place. With the whatsapp purchase, Facebook might be able to change that trend

     

    Facebook might as well use their purchasing power now to take advantage of trends. Remember, Google passed on buying Facebook when the valuation was only about 1 or 2 billion (cant remember exactly). Maybe WhatsApp is the next Facebook. To buy it at 16B - with most of the acquisition paid for in stock - might represent a good deal, when everything plays out, down the road.

     

    I would still never invest in Facebook, but I am a blue-chip, high moat, dividend champion style of investor. So, these tech companies - Facebook, Amazon, Netflix etc. are never going to peak my interest.
    19 Feb, 05:22 PM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    An acquisition is only positive value if it is worth more than they paid for it. Unless you seriously think that $19B is a reasonable price, then this is a bad deal for Facebook. The problem with Facebook is that they will have to spend 10 years earnings every year to fend off the competition. Reminds me of the guy who was losing 10 cents on every unit but figured he'd make it up in volume.
    19 Feb, 05:34 PM Reply Like
  • positivethoughts
    , contributor
    Comments (1927) | Send Message
     
    Yeah, the ten years of earnings every year to fend off competition is a good point.

     

    It will be hard for Facebook to do if they dont innovate as well as new competitors.
    19 Feb, 05:40 PM Reply Like
  • sethlemay
    , contributor
    Comments (198) | Send Message
     
    I can easily see teens moving to something else as soon as big brother facebook is watching. Who wants to be part of the establishment when you are independent and cool?
    19 Feb, 08:22 PM Reply Like
  • thesuer
    , contributor
    Comments (273) | Send Message
     
    It is cheap. Calculating value with stock is insignificant, the cash outflow is what matters. Facebook actually paid 4 billion in cash and the rest in stock. 19 billion with 2 billion in breakup fees. Forget the stock as that is probably locked up and is accounted for but the cash payment is actually equivalent to 1,5 usd per Facebook shareholder or 2.2% like a dividend. The stock should open approximately 2.2% or more down. The deal at 4 billion is cheap the rest is paper millionaires, what dreams are made off. How do you monetize this who cares, everyone's uses what's app!
    20 Feb, 04:33 AM Reply Like
  • Peter89
    , contributor
    Comments (307) | Send Message
     
    16 WHAT?? I have whatsapp and wechat. Personally, I prefer wechat over whatyamacallit.
    19 Feb, 05:23 PM Reply Like
  • Black Gold
    , contributor
    Comments (586) | Send Message
     
    Actually the price is $19B as there will be $3B in restricted stock units granted to employees of whatsapp.
    19 Feb, 05:25 PM Reply Like
  • xilef
    , contributor
    Comments (473) | Send Message
     
    Additional 430mil MAUs. They can afford it, only 4 out of 12 bil spent in cash, the rest in stock. If the market was willing to pay for FB growth before, the chances are they'll be willing to pay even more now. This will go lower following the news and provide a decent re-entry point.
    19 Feb, 05:26 PM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    They are not additional as I would assume almost 100% of them are overlapping. That's the same reason they don't include Instagram MAUs included in the Facebook MAUs. Because they are all the same MUs.
    19 Feb, 05:36 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2935) | Send Message
     
    I'm surprised they agreed to any cash at all. Considering the huge overvaluation of FB it makes sense to use as much paper as possible.
    19 Feb, 05:44 PM Reply Like
  • Snoopy1
    , contributor
    Comments (1115) | Send Message
     
    True, but what else is FB going to do with the cash - earn 1% or buy back their own overpriced stock? :-)
    19 Feb, 06:11 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2935) | Send Message
     
    You agree the stock is overpriced-so it makes sense to sell it

     

    They're selling it by issuing new shares to make acquisitions. They can always spend the cash later when the stock is not overvalued (if it ever gets there).
    19 Feb, 06:14 PM Reply Like
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
     
    $16B! LOL I googled 'over-paying' and this was first on the list.

     

    Absurd.
    19 Feb, 05:27 PM Reply Like
  • bgold1955
    , contributor
    Comments (2095) | Send Message
     
    Based on 10 minutes of analysis? Pretty quick evaluation.
    19 Feb, 05:31 PM Reply Like
  • Black Gold
    , contributor
    Comments (586) | Send Message
     
    http://bit.ly/1gHt6Nb

     

    Looks like whatsapp may need to pull this no-ads blog post down soon...

     

    Whatsapp is free for the first year and then costs $1 a year to use after that. How is FB going to monetize this? Bring in a max of around $430M a year on a $19B purchase which risks becoming a fad and if you try to add advertisements you likely risk pushing some of those users away to other places? Puzzling...
    19 Feb, 05:34 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1202) | Send Message
     
    Think of the synergy, mindshare and eyeballs !
    19 Feb, 05:47 PM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    Thanks for the laugh wacko! Someone out there will think you are serious though :-(
    19 Feb, 05:49 PM Reply Like
  • aow
    , contributor
    Comments (136) | Send Message
     
    Per user, they're paying not all that much more than the Instagram purchase and I reckon Whatsapp will be around FAR longer than Instagram.

     

    Not to mention FB is all about capturing user data and parlaying that into ad dollars. Whatsapp's message volume rivals that of the ENTIRE WORLD'S SMS volume, if they can take all that data, they'll be able to turn that into huge revenue overtime (not to mention placing ads w/in the App itself). They won't just target ads because you "like" a band on your FB profile, they'll target ads for the bands tickets when your friend texts you about them, ads for plane tickets when you're talking of vacation possibilities, etc. I still think the valuation is absurd (about 10% of FB's market cap) but Whatsapp certainly has more value than most seem to think. Don't forget, when FB went public there were a ton of naysayers claiming the company was worth a few billion. Time will tell.
    19 Feb, 07:38 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1202) | Send Message
     
    should i even bother to ask if WhatsApp had revenues? I said revenue not eyeballs ..
    19 Feb, 05:35 PM Reply Like
  • positivethoughts
    , contributor
    Comments (1927) | Send Message
     
    Eyeballs are everything when the NSA has an unlimited 'black budget' and is in bed with tech companies.

     

    Maybe the NSA financed this deal between Facebook and WhatsApp.
    19 Feb, 05:46 PM Reply Like
  • Mark Krieger
    , contributor
    Comments (4103) | Send Message
     
    FB paid 15 times earnings! NOT!!!!!!!!!!!!!!!!!!!!
    19 Feb, 06:29 PM Reply Like
  • Richard0623
    , contributor
    Comments (142) | Send Message
     
    Good old Mark just taking care of his tech buddies and friends at the expense of shareholders
    19 Feb, 05:50 PM Reply Like
  • bgold1955
    , contributor
    Comments (2095) | Send Message
     
    Somebody is buying after the initial sell off. Down less than 2% now. Whatsup!
    19 Feb, 05:54 PM Reply Like
  • SharkETF
    , contributor
    Comments (56) | Send Message
     
    $16 - $19 B... IS THIS A JOKE?

     

    For a company with 50 employees, no revenue model and 430 million users?????
    19 Feb, 05:54 PM Reply Like
  • divinecomedy
    , contributor
    Comments (466) | Send Message
     
    SUCKER berg. That's all you need to know.
    19 Feb, 05:55 PM Reply Like
  • bgold1955
    , contributor
    Comments (2095) | Send Message
     
    As a very happy shareholder I will, at this point, give FB the benefit of doubt as they grew REVENUES FROM:

     

    777million in 2009

     

    TO

     

    7.9billion in 2013

     

    That is over ten times growth in 5 years.
    19 Feb, 06:11 PM Reply Like
  • leebailey85
    , contributor
    Comments (78) | Send Message
     
    But they had barely any ads in 2009--now the website is stuffed with them. What are the remaining growth channels? Don't expect revenue growth from here on out to be anything like the past
    19 Feb, 10:44 PM Reply Like
  • David Jackson
    , contributor
    Comments (1234) | Send Message
     
    If FB is paying $19bn for WhatsApp, and many of those users already have Facebook accounts, perhaps this means FB isn't as sticky and its moat isn't as wide as many investors thought.
    19 Feb, 05:56 PM Reply Like
  • divinecomedy
    , contributor
    Comments (466) | Send Message
     
    SUCKER, meet Ice Berg. Sorry guys, but this deal has unhinged me.
    19 Feb, 06:13 PM Reply Like
  • Josh Franklin
    , contributor
    Comments (977) | Send Message
     
    Wow!
    19 Feb, 06:03 PM Reply Like
  • tawse57
    , contributor
    Comments (757) | Send Message
     
    I am on whatsapp so I can avoid facebook - several friends are similar. I will now leave whatsapp asap.

     

    I am now googling how to close my whatsapp account.
    19 Feb, 06:07 PM Reply Like
  • dieuwer
    , contributor
    Comments (2408) | Send Message
     
    I tried whatsapp for 3 minutes or so. When I found out it tried to hack my address book, I deleted it. Now that Facebook is buying, I will NEVER EVER look at it again.

     

    I do feel sorry for all those whatsapp users that now for sure will get spammed with junky facebook ads.
    19 Feb, 06:13 PM Reply Like
  • nedilwo
    , contributor
    Comments (63) | Send Message
     
    Can anyone quantify the overlap in users (or eyeballs if you prefer)? That analysis seems important. My understanding of WhatsApp is somewhat limited except that I understand that is very popular outside of the US, particularly Europe. So, how much of the Rest of the World is an overlap? I certainly agree that the price tag is a "Holy Cow". I'm long FB, at least I thought I was.

     

    To "positivethoughts", "peaked my interest" should be "piqued my interest" unless you intending a different meaning, which would be somewhat the opposite.
    19 Feb, 06:11 PM Reply Like
  • positivethoughts
    , contributor
    Comments (1927) | Send Message
     
    Thanks grammar Nazi.

     

    By the way, it's 'you're', not 'you intending'. See how useless contributions of language editing get on people's nerves?
    19 Feb, 07:25 PM Reply Like
  • nedilwo
    , contributor
    Comments (63) | Send Message
     
    Well, you got me. I did not mean to get on your nerves.
    20 Feb, 10:19 AM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (9080) | Send Message
     
    Why not? The stock is so ridiculously overvalued so trading it for another overvalued company to shore up its moat is actually a really smart move.
    19 Feb, 06:13 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1971) | Send Message
     
    Makes sense, so it is really the FB shareholders that are the ultimate suckers here...
    19 Feb, 06:21 PM Reply Like
  • bgold1955
    , contributor
    Comments (2095) | Send Message
     
    Depends when shareholder bought & subsequently sells if he/she is a sucker.
    19 Feb, 06:26 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    yeah, what a sucker I am for entering at $35
    you should shed many tears for me as I suffer
    19 Feb, 06:57 PM Reply Like
  • Special Situations and Arbs
    , contributor
    Comments (584) | Send Message
     
    Agree....but each time they buy someone they dilute.....it would be better to include 7b stock vs 12b stock

     

    unless we think FB will turn out to be GOOG it may become a great short sometime soon
    20 Feb, 01:34 AM Reply Like
  • Mohamed Abdirahman
    , contributor
    Comments (109) | Send Message
     
    whoa, this came as a big surprise. Whatsapp does not place any ads on the app and is only financed by a $1 or so fee each year. If it has 400m users that's $400m (in REVENUE!) Lets assume they have 50% margin, at this rate it would roughly take 95(!) years for this to break even.

     

    FB has really outdone itself this time! This will go down in history as THE most insanely extravagant and catastrophic purchase of all time (at the very least its place in the top 10 is secured)!
    19 Feb, 06:15 PM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (9080) | Send Message
     
    It's done in overpriced FB stock, so what does it matter?

     

    If I could print money so easily as FB, I'd do it to buy whatever I wanted, too.
    19 Feb, 06:17 PM Reply Like
  • Mohamed Abdirahman
    , contributor
    Comments (109) | Send Message
     
    Don't forget the $4B in cash = 1/3 of the cash at FB. Equally bad, if the merger doesn't go ahead (e.g. if it doesnt get regulatory approval) then FB will pay $1B in cash and get NOTHING. Insane!
    19 Feb, 07:22 PM Reply Like
  • positivethoughts
    , contributor
    Comments (1927) | Send Message
     
    Ashraf,

     

    I read your comment and at first I thought you wrote....'If I could print money as easily as the US government, I'd do it to buy whatever I wanted, too.'
    19 Feb, 07:31 PM Reply Like
  • leebailey85
    , contributor
    Comments (78) | Send Message
     
    Ashraf, they didn't just trade the stock for it. They also gave away 1/3 of cash on hand
    19 Feb, 10:46 PM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    and 200% of last years earnings in cash.
    20 Feb, 08:44 AM Reply Like
  • tawse57
    , contributor
    Comments (757) | Send Message
     
    It is basically a text messaging device. As most European mobile phone deals now include unlimited texts or 500, 1,000 or 5,000 month why bother with whatsapp?

     

    OK, perhaps buy it for a billion or two but 19 billion is just crazy. Can't help feeling that those in charge of fb have no idea how much 19 billion is in the same way a millionaire thinks 50K is nothing.
    19 Feb, 06:17 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1202) | Send Message
     
    where are users mostly? Asia?
    I pretty much iMessage with vast majority of my friends ..
    19 Feb, 06:50 PM Reply Like
  • aow
    , contributor
    Comments (136) | Send Message
     
    Doesn't explain why Whatsapp is most popular in Europe and South America, both of which commonly have those deals.

     

    One of the major reasons people (particularly young people) use the App is for seamless group chats across multiple platforms (i.e. try doing a group chat b/w android and apple users, good luck!). Kids these days have all their friends on Whatsapp group chats, it's how they set up their friday nights, pickup ball games, etc.
    19 Feb, 07:43 PM Reply Like
  • Mark Krieger
    , contributor
    Comments (4103) | Send Message
     
    FB totally got ripped off by paying way too much. This sounds like another AOL scenario.
    19 Feb, 06:19 PM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (9080) | Send Message
     
    Dude, they're doing it mostly in FB shares which is funny money. There is no such thing as overpaying. lol
    19 Feb, 06:20 PM Reply Like
  • xilef
    , contributor
    Comments (473) | Send Message
     
    Precisely Ashraf. They spent only 4bil out of their 12bil. The rest is simply stock. But you'll only hear the 19bil for now, which will provide a good buying opportunity while the dust is settling.
    19 Feb, 06:36 PM Reply Like
  • Information Overload
    , contributor
    Comments (59) | Send Message
     
    Even just the cash part is too much.
    19 Feb, 10:10 PM Reply Like
  • thesuer
    , contributor
    Comments (273) | Send Message
     
    You are the one smart man in the crowd of ohhhhhs and ahhhhsss. I agree. Facebook actually paid 4 billion in cash and the rest in stock. 19 billion with 2 billion in breakup fees. Forget the stock as that is probably locked up and is accounted for but the cash payment is actually equivalent to 1,5 usd per Facebook shareholder or 2.2% like a dividend. The stock should open approximately 2.2% or more down. The deal at 4 billion is cheap the rest is paper millionaires, what dreams are made off. How do you monetize this who cares, everyone's uses what's app!
    20 Feb, 04:34 AM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    theuser, can you please stop copy and pasting that same response over and over? If you dont understand that stock has value and dilutes you, I cant really help you but please at least only make that wrong comment once.
    20 Feb, 08:46 AM Reply Like
  • cashawash
    , contributor
    Comments (634) | Send Message
     
    Sounds like, I accidentally stumbled in the Bears and Shorts nest.
    Everybody is totally marching in lock-step agreement here, so I will not posit any opinion. There is no pretense at objectivity on the thread here, folks!!!
    I remember a similar response to the Instagram acquisition, yet; that now is being hailed as a stroke of genius.
    I guess all you "egg-spurts" have rounded up the posse, and are ready to hang 'em high 'cause of your existing short positions, eh.
    I prefer wait and examine the details of this current acquisition before I prematurely jump on the hatters band wagon, eh.
    19 Feb, 06:21 PM Reply Like
  • bgold1955
    , contributor
    Comments (2095) | Send Message
     
    Cash.... Good idea. Bunch of folks here are not shareholders so criticism comes easily as they netted nothing.
    19 Feb, 06:30 PM Reply Like
  • Manitobatex
    , contributor
    Comments (679) | Send Message
     
    I agree......there is method in his madness.
    19 Feb, 06:51 PM Reply Like
  • drpersky@drpersky.com
    , contributor
    Comments (119) | Send Message
     
    At least the shorts and bears can't argue that Facebook isn't worth at least $19 billion. Be well.

     

    Doc
    19 Feb, 11:49 PM Reply Like
  • Mark Krieger
    , contributor
    Comments (4103) | Send Message
     
    $19B to a company with 50 teenagers working for it? Isn't that a tad excessive?
    19 Feb, 06:29 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Wow,

     

    Reading comments here it would appear many are short FB.
    Interesting, almost no positive comments whatsoever.
    19 Feb, 06:36 PM Reply Like
  • bdy
    , contributor
    Comments (151) | Send Message
     
    Nice! I shorted FB today
    19 Feb, 06:38 PM Reply Like
  • Bigisbetter
    , contributor
    Comments (591) | Send Message
     
    This is long term good news for FB
    19 Feb, 06:41 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    So many people posting here apparently are way way smarter than Zuckerberg
    and FB corporate honcho's.
    19 Feb, 06:59 PM Reply Like
  • cashawash
    , contributor
    Comments (634) | Send Message
     
    Great point!! You figure this marriage wasn't a willy nilly decision.
    It took Zuck and his mgmt team over a year to scrutinize, and kick the tires, to size up this deal before performing a "CEO mind meld with WhatsApp".
    Zuck's uber-intelligence, and his unique penchant for unpredictability in decision making, is a strength, that will confound and derail, FB's short players over and over again.
    20 Feb, 04:23 AM Reply Like
  • Bigisbetter
    , contributor
    Comments (591) | Send Message
     
    FB ONLY TRYING TO MAKE REVENUE . THAT IS GOOD.
    19 Feb, 07:06 PM Reply Like
  • slee12dent
    , contributor
    Comments (36) | Send Message
     
    19B is quite excessive (with its valuation Fb should be worth 2x its stock price).. WeChat is prefered by Chinese because its free vs whatsapp.
    19 Feb, 07:16 PM Reply Like
  • gstanden
    , contributor
    Comments (380) | Send Message
     
    They could have bought Blackberry (for BBM) lock stock and barrel for much less than $19B and had BBM, and in addition to BBM, could have cherry picked the rest of Blackberry's assets, and acquired a nice patent portfolio in the process. I'd call the FB acquisition of WhatsApp a wise, but gutless and excessively expensive purchase, indicative of a management at FB that is unskilled at turnarounds and unskilled at value investing, merely looking for easy overpriced deals.
    19 Feb, 08:43 PM Reply Like
  • Oczssd
    , contributor
    Comments (28) | Send Message
     
    "indicative of a management at FB that is unskilled at turnarounds and unskilled at value investing"

     

    What the hell are you talking about?

     

    They purchased instagram at 70mil users and thats now grown to over 180mil and its making money. Once they integrate FB with whatsapp the user base will reach 750mil within a year. How they will monetize it remains to be seen but there is a plan here and so far it has been working.

     

    Long FB.
    19 Feb, 09:24 PM Reply Like
  • gstanden
    , contributor
    Comments (380) | Send Message
     
    Great points!
    19 Feb, 09:39 PM Reply Like
  • cashawash
    , contributor
    Comments (634) | Send Message
     
    If you look at Twitter's market cap by comparison to WhatsApp, you can make a case that WhatsApp was purchased at a discount.
    TWTR's growth rate is miniscule compared to WhatsApp. At a million users per day, WhatsApp is running circles around TWTR, and every other mobile app in the world. No wonder Twitter's growth is slowing, WhatsApp is sucking up all of the oxygen on a global scale.
    Ask yourselves: what would WhatsApp be worth, if it where to IPO with all that growth?
    With WhatsApp in the Facebook camp, FB will remove a formidable competitor, and add another powerful rocket engine to launch it's growth to geometric levels, and hasten it's journey to the stars!!!
    Once again, Zuck's team brain synapses are quantum levels ahead of his critics and detractors.
    20 Feb, 04:47 AM Reply Like
  • longday_trader
    , contributor
    Comments (55) | Send Message
     
    The more I consider this deal, the more I reflect on how Zuck is trying to stimulate growth in much the same way Fed policy has done. Think about how much of this deal is paper only--not real cash. FB is printing its own money ( metaphorically speaking ) in order to fend off or thwart any pressures that could impinge upon its revenue stream; but since so much of it is stock, the real cost is less. Looks like our Harvard grad had been watching Big Ben's policy decisions and trying to implement this as both a growth and defense strategy. Wall Street is at record highs. Investors feel rich. Whatsapp is being bought at a record high. They now are feeling rich. But it's printed wealth...for now. Will it implode , as Ben's policy making also could? Time will tell, and the similarity is very striking to me.....
    19 Feb, 08:50 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    All those stocks can be converted into Benjamins.

     

    The last 5 years has been a great ride and I would guess many are playing with house money now.
    19 Feb, 09:38 PM Reply Like
  • longday_trader
    , contributor
    Comments (55) | Send Message
     
    Oh, and I also wonder if Snapchat 's CEO is on his fifth bottle of beer right now?!
    19 Feb, 08:59 PM Reply Like
  • Bouchart
    , contributor
    Comments (780) | Send Message
     
    Is FB's strategy to buy any and all competitors? Because that won't work.
    19 Feb, 09:58 PM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (9080) | Send Message
     
    Why not? FB has a highly overinflated currency that it can deploy at will.
    20 Feb, 01:13 AM Reply Like
  • vandeley
    , contributor
    Comments (119) | Send Message
     
    FB knows their stock is overvalued, and they are using it to improve their moat and long term viability, but any current shareholder should take this as a signal to get out after a nice ride.
    20 Feb, 04:35 AM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Here's the deal folks....the difference between those of us posting on
    message boards and billionaires like Zuckerberg, Brian Acton and Jan Koum is vision.
    Sorry, but thats just reality.

     

    Zuckerberg has stated repeatedly he is looking long term and my guess is
    they are purposely being vague not because they don't know how to go forward
    but because they know exactly what they are going to do to monetize this and
    are smart enough not to shout it to the world so they can be first to market, if you will.
    19 Feb, 10:32 PM Reply Like
  • Stephen Aniston
    , contributor
    Comments (2700) | Send Message
     
    He could have paid 5 billion and probably would still have a deal. Double it to 10, I doubt they would say no. 20 is way overboard. There is no metric that justifies this valuation.
    19 Feb, 10:45 PM Reply Like
  • leebailey85
    , contributor
    Comments (78) | Send Message
     
    I'd say it's work ethic and luck more than vision. They didn't spend all their time analyzing other companies trying to make 20 or 30% returns. They spent all their time actually creating value and getting 4000% returns with only risking their time. The ultimate alpha
    19 Feb, 10:49 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Google offered 10 billion and was turned down and only time will tell if
    the price justifies the valuation.
    20 Feb, 10:32 AM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (1905) | Send Message
     
    What I am not seeing here in the comments is the fact that FB is VERY successful to be able to handle these things.
    I always like to buy a stock moving up, and with the increase in 'ridership', this ship is gonna do well.
    I say, buy all you like.
    My managers are doing just fine, so I am not gonna say anything, but I will suggest you get Candy Crush NOW before it gets listed.
    I can tell you, there are one hell of a lot of gamers out there, and it is spreading like a virus globally.
    Capt. Brian
    The Lost Navigator
    19 Feb, 10:34 PM Reply Like
  • JillKennedy
    , contributor
    Comments (78) | Send Message
     
    Facebook must be stopped!
    http://bit.ly/vr40Qt
    19 Feb, 10:41 PM Reply Like
  • drpersky@drpersky.com
    , contributor
    Comments (119) | Send Message
     
    Hi Jill,

     

    Read your article, entertaining. Still seem a little angry about FB but less so. Seemed like you had more to say but had to get back to your Facebook Timeline. Best form of media communication in the history of mankind…Must be stopped! Sounds like a future James Bond movie I will look forward to seeing. Be well.

     

    Doc
    20 Feb, 12:06 AM Reply Like
  • positivethoughts
    , contributor
    Comments (1927) | Send Message
     
    'best form of media communication' for narcissists 'in the history of mankind'.

     

    Fixed it for you.

     

    My ex-girlfriend couldnt pick up her phone or return messages, she changed best friends 3 times in the 2 years before we met and she also changed boyfriends 2 times in 6 months before we met..... ......but she had 375 Facebook friends.

     

    Facebook makes people less able to communicate effectively.

     

    Just saying.
    20 Feb, 12:14 AM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    You just chose the wrong girl.
    Not everyone uses FB the same way.
    I go on about once every ten days to two weeks for about 5 minutes.
    20 Feb, 07:33 AM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    22643611, as an MAU and a shareholder, you are valuing yourself at $144. Does that seem right to you?
    20 Feb, 08:52 AM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    I can't predict the future nor do I know how accurate those
    MAU's are and how long others stay on or how often.
    I do know what the earnings were and also realize that
    the vision these people have are far different than those of us
    posting our opinions which is why they are billionaires and
    I'm guessing not you or anyone else posting in the negative or positive are........or even close.

     

    This is not a value stock and I don't treat it as such.
    20 Feb, 10:35 AM Reply Like
  • Stephen Aniston
    , contributor
    Comments (2700) | Send Message
     
    For a 2 year old company, 20 billion is excessive. No hedge fund manager can make 20 billion in 2 years starting from scratch even if he had perfect crystal ball. I can't think of any such parallel in any business. This is unheard of.
    19 Feb, 10:43 PM Reply Like
  • jbound
    , contributor
    Comments (60) | Send Message
     
    Rakuten just paid 900M for Viber. 300M users. Three bucks a user as opposed to 40+.
    19 Feb, 11:12 PM Reply Like
  • howieLONG
    , contributor
    Comments (42) | Send Message
     
    Seems Ashraf is the only person here that gets it. They paid $4B in cash. The rest in stock. This for a company that has nearly twice as many MUAs than Twitter. Initial shock but let's see what we hear in the next 24 hours. And let's all remember which I think is often forgotten, the insiders know just a little bit more than we do.
    19 Feb, 11:13 PM Reply Like
  • drpersky@drpersky.com
    , contributor
    Comments (119) | Send Message
     
    Emerging Markets!
    20 Feb, 12:07 AM Reply Like
  • O.D.B.
    , contributor
    Comments (2) | Send Message
     
    Whatsapp is massively used in europe. I hardly know anybody not using it. Absolute standard here. Makes conversation between your friends more quick and direct. Maybe u guys in the US will find out soon ;) To me, smart move in the long term even though 19 B is quite a lot.
    19 Feb, 11:13 PM Reply Like
  • jnlianides
    , contributor
    Comments (2) | Send Message
     
    Whatsapp is huge in Chile and Peru. Mobile carriers typically give a choice of about 100 minutes or text messages per month for an affordable plan. That is nothing.
    19 Feb, 11:14 PM Reply Like
  • jnlianides
    , contributor
    Comments (2) | Send Message
     
    Whatsapp is huge in Chile. Mobile carriers typically offer unlimited internet (or a large amount of data) and only about 100 minutes or text messages for an affordable plan. It doesn't surprise me that this app is highly demanded, because the archaic infrastructure for these mobile carriers is allowing for FB infiltration.
    19 Feb, 11:15 PM Reply Like
  • I Ching
    , contributor
    Comments (7) | Send Message
     
    1. Today's WhatsApp can be tomorrow's MySpace. Sure .. it can happen. Has before, will again.

     

    2. FB stock will be diluted by 12,000 million dollars.

     

    3. Mobile Carriers, who OWN the NETWORK and ubiquitous SMS will eventually respond and reduce the price of SMS to zero and add "in-app" ads. SMS is built-in, default and simplest to employ. Will cut legs out from WhatsApp. Carriers will not let 3rd party App compromise core COMS offering. Period.

     

    4. Ching extrapolates that this will prove to be extraordinary strategic blunder.

     

    FB's chickens will eventually come home to roost. Note well.

     

    -Ching
    20 Feb, 12:42 AM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (9080) | Send Message
     
    Nobody cares. People will keep bidding FB up, FB will keep buying competitors with overinflated stock...rinse and repeat ;-)
    20 Feb, 01:13 AM Reply Like
  • fafatooey
    , contributor
    Comments (386) | Send Message
     
    Google was in for 15B, Facebook won at 16B. Guess Google doesn't know what they are doing too?
    20 Feb, 02:13 AM Reply Like
  • tawse57
    , contributor
    Comments (757) | Send Message
     
    Or they just got FB to overpay?
    20 Feb, 05:02 AM Reply Like
  • tka700
    , contributor
    Comments (39) | Send Message
     
    According to Forbes, Whatsapp made meager $20 mio 2013! $19 B for this outfit is way over priced. Even if we consider it as $4 B only cash.

     

    FB Market price - in coming days - will reflect the sanity of deal by Mr Sugarberg.
    20 Feb, 02:15 AM Reply Like
  • david freese
    , contributor
    Comments (82) | Send Message
     
    @JillKennedy,
    Hahaha this is a great link. 2+ year old blogpost talking about FB demise. I bought FB short/medium term and am not a fbatic... I am up 20%+ and thought it was a solid 50%+ gain in next 8 months. But after reading Jill's wonderful post from 2011 we'll i might have to revise my PT.
    20 Feb, 05:04 AM Reply Like
  • mitrado
    , contributor
    Comments (2003) | Send Message
     
    Over the past three years, $GOOG was involved in 126 deals worth $17.6 billion. - Just to put it in perspective.
    20 Feb, 07:01 AM Reply Like
  • Josh Franklin
    , contributor
    Comments (977) | Send Message
     
    GOOG should buy AUDC to compete with Skype and Viber

     

    Its coming - long AUDC
    20 Feb, 08:59 AM Reply Like
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