Facebook is buying WhatsApp for $16 billion

[Liquid]

Book value is irrelevant though...that'd make the deal even more ridiculous.

Overall...that 15 million in shares though is about 9% of FB's current market value. That's an extremely steep, dilutive price but I understand it. It's a good acquisition but still...its overpriced. We cant forget what it is after all...a mere messaging app. But we aint anybody to talk so I'm sure FB mgmt knows what its doing. Time will tell.

Morgan Stanley musta made a hell of a pitch though to get that kinda money outta FB

The purchase price was based on potential and I think a strong argument for 16 billy can be made, ESPECIALLY when its facebook

 

[Real]

I'm not international like dat.

 

[Ohene]

The purchase price was based on potential and I think a strong argument for 16 billy can be made, ESPECIALLY when its facebook

Meh...when you think of the pinnacle of established web stocks the obvious answer is Googles so lets use their valuation as a benchmark. It's hard to compare FB to other companies because its the trailblazer for new social media but nonetheless I think that FB (which is also OVERvalued) is striving to be google.

(note: this is without even factoring the patents and intangibles of google lol)
Sales: 60 Billion a year
Market cap: 400 Billion
Multiple of 6.5. (a lot of this multiple is the patents and intanglibles)

My second choice would probably be Ebay (i'd say Amazon but they had a bad year so their metrics are off)
Sales of 17B
Market cap of probably 70B
Multiple of about 4.5

Yahoo has a multiple of around 7.5. Priceline's is 11 (but Expedia's is only 2.5 ).

Lets just use an average multiple of 7 for established web companies.

What's app would have to eventually generate or contribute to making $2.5 Billion in revenue a year for this acquisition to make sense in the long run. I dunno if thats possible. FB is a relatively volatile stock and its cost of equity is presumably high making it that much harder to make a good ROI especially if they keep diluting the shares with these acquisitions. I havent gone deep at all but if you seriously crunch the numbers it has to be overpriced. And I aint even comparing to mass media cause then the metrics would be completely absured. Wall street is gaming these tech companies. Like Poitier said its a bubble I think.

FYI: FB's P/Sales ratio is 20 which is fair for now. But the expectations of these new age tech stocks seems too optimistic for me. There's probably a lot more that we cant see though with respect to how they will use it.

 

[Sensitive Blake Griffin]

Book value is irrelevant though...that'd make the deal even more ridiculous.

Overall...that 15 million in shares though is about 9% of FB's current market value. That's an extremely steep, dilutive price but I understand it. It's a good acquisition but still...its overpriced. We cant forget what it is after all...a mere messaging app. But we aint anybody to talk so I'm sure FB mgmt knows what its doing. Time will tell.

Morgan Stanley musta made a hell of a pitch though to get that kinda money outta FB

Well it may be more cash than we'd expect then, The stocks would evaluated at FMV, they're basically giving them a part of their company through the stock, probably worth quite a bit

 

[L&HH]

I looked up Facebook's financials. For 2013 Fiscal year:

Revenue: US$7.872 billion

Total Assets: US$17.895 billion

Total Equity: US$15.47 billion

HOW THE fukk CAN THEY EVEN AFFORD THIS????!!!!!!!

cash and stock

 

[The Coochie Assassin]

whats wrong with text messages?

some of us got women internationally we gotta check up on every now and then

 

[Bboystyle]

I wonder when/if Apps will start being apart of the stock exchange. I wanna invest into one of these shytty Apps and hopefully Mark da gawd will come in and swoop that shyt up

 

[Liquid]

Meh...when you think of the pinnacle of established web stocks the obvious answer is Googles so lets use their valuation as a benchmark. It's hard to compare FB to other companies because its the trailblazer for new social media but nonetheless I think that FB (which is also OVERvalued) is striving to be google.

(note: this is without even factoring the patents and intangibles of google lol)
Sales: 60 Billion a year
Market cap: 400 Billion
Multiple of 6.5. (a lot of this multiple is the patents and intanglibles)

My second choice would probably be Ebay (i'd say Amazon but they had a bad year so their metrics are off)
Sales of 17B
Market cap of probably 70B
Multiple of about 4.5

Yahoo has a multiple of around 7.5. Priceline's is 11 (but Expedia's is only 2.5 ).

Lets just use an average multiple of 7 for established web companies.

What's app would have to eventually generate or contribute to making $2.5 Billion in revenue a year for this acquisition to make sense in the long run. I dunno if thats possible. FB is a relatively volatile stock and its cost of equity is presumably high making it that much harder to make a good ROI especially if they keep diluting the shares with these acquisitions. I havent gone deep at all but if you seriously crunch the numbers it has to be overpriced. And I aint even comparing to mass media cause then the metrics would be completely absured. Wall street is gaming these tech companies. Like Poitier said its a bubble I think.

FYI: FB's P/Sales ratio is 20 which is fair for now. But the expectations of these new age tech stocks seems too optimistic for me. There's probably a lot more that we cant see though with respect to how they will use it.

I think for "What's App" offers it can be extremely profitable for Facebook. 2.5 billion is a large number, but Facebook still has 1 billion active users per month.

I bet Zuck and the crew will be something and fully integrating it soon. I personally think its a better buy than Instagram was.

 

[Malik]

WHAT AM I DOING WITH MY LIFE

 

[Artificial Intelligence]

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[EA]

I'm fearful for the possibilities after Facebook decide to integrate WhatsApp into their ecosystem. Right now, WhatsApp is great because you can only message people if you have their number and vice versa. I'm afraid that Facebook will explore integrating Facebook contacts into it as well now.

I'm trying to be low key out here

 

[PimpHandStrong]

What's the difference between Kik and WhatsApp??

 

[Kaypain]

@ those daps

I guess a lot don't know what it is either

 

[BasedPrime]

 

[Artificial Intelligence]

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