Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek

Trending

Filed under: News

 

Stunner: Facebook To Buy WhatsApp For $19 Billion In Cash, Stock

Feb 19 2014, 5:31pm CST | by

1 Updates
Stunner: Facebook To Buy WhatsApp For $19 Billion In Cash, Stock
 
 

YouTube Videos Comments

Full Story

Stunner: Facebook To Buy WhatsApp For $19 Billion In Cash, Stock

Facebook announced on Wednesday afternoon that it had reached an agreement to buy popular mobile messaging startup WhatsApp for an upfront total of $16 billion, including $4 billion in cash and about $12 billion in Facebook shares.

Co-founder and CEO Jan Koum will join Facebook’s Board of Directors, but WhatsApp will continue to operate independently within Facebook, much like Instagram. The purchase price could rise to as much as $19 billion once you factor in an additional $3 billion in restricted stock units that will be granted to WhatsApp’s founders and employees vesting over four years.

The purchase price is insanely high for a startup with only 55 employees, and many multiples of Facebook’s reported $3 billion bid for Snapchat last year. The $19 billion valuation means Facebook believes WhatsApp is worth over $42 per user. Major companies that have market caps under $19 billion include: United Continental, American Airlines, Ralph Lauren, Marriot International, Campbell Soup, Coach, and Tyson Foods.

The acquisition also shoots Koum and his fellow WhatsApp co-founder Brian Acton into the billionaire ranks. FORBES estimates that Koum held about a 45% stake in the company, while Acton’s stake was over 20%.

In event the merger fails to obtain regulatory approval, Facebook has agreed to pay a breakup fee to WhatsApp of $1 billion in cash and issue to WhatsApp shares of Facebook Class A common stock equal to another $1 billion.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” Facebook CEO Mark Zuckerberg 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.”

“WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world,” Koum said.

WhatsApp has over 450 million monthly users, 70% of whom are active on a given day. They are adding more than 1 million new registered users per day. As part of the deal, its headquarters will remain in Mountain View, CA and WhatsApp’s team will not mix with those working on Facebook’s existing Messenger app.

Follow Brian on Facebook and Twitter.

The Evolution Of Facebook

Source: Forbes

 

You Might Also Like

Updates


Sponsored Update


Advertisement


More From the Web

Shopping Deals

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

Comments

blog comments powered by Disqus

Latest stories

Tony Romo Confident Heading Into Week 1 of NFL Regular Season
Tony Romo Confident Heading Into Week 1 of NFL Regular Season
Dallas Cowboys head coach Jason Garrett told the media on Sept. 1 that his quarterback, Tony Romo, has "got that look on his face" and is confident heading into the Cowboys' Week 1 showdown against the San Francisco 49ers on Sept. 7.
 
 
Houston Astros Fire Bo Porter
Houston Astros Fire Bo Porter
The Houston Astros fired manager Bo Porter and bench coach Dave Trembley after the team posted a 59-79 record through Sept. 1. Adam Everett will replace Trembley while the search for the Astros' new manager begins immediately.
 
 
Tinder App Review
Tinder App Review
Tinder is a great mobile app for those who love making new friends. It's a fun way to make interesting people your friends. Just log in, swipe right to like or left to pass, and if the person likes you back, “It's a Match” for you. Making friends is a lot fun now if you are on Tinder.
 
 
SketchBook Pro App Review
SketchBook Pro App Review
Sketchbook Pro, as the name suggests, is a professional-grade design and illustration app. The app is appraised to be one of the best mobile apps for design, sketching, painting and illustration. This app is predominantly used by on-the-go artists, designers and illustrators. This app is also used by teens who are interested in arts and by children to practice drawing and painting in a way that is much more interactive than regular painting book activities. So on the whole, SketchBook Pro is a very productive mobile application that targets a heterogeneous audience.
 
 
 

About the Geek Mind

The “geek mind” is concerned with more than just the latest iPhone rumors, or which company will win the gaming console wars. I4U is concerned with more than just the latest photo shoot or other celebrity gossip.

The “geek mind” is concerned with life, in all its different forms and facets. The geek mind wants to know about societal and financial issues, both abroad and at home. If a Fortune 500 decides to raise their minimum wage, or any high priority news, the geek mind wants to know. The geek mind wants to know the top teams in the National Football League, or who’s likely to win the NBA Finals this coming year. The geek mind wants to know who the hottest new models are, or whether the newest blockbuster movie is worth seeing. The geek mind wants to know. The geek mind wants—needs—knowledge.

Read more about The Geek Mind.