Facebook to buy WhatsApp

The world largest social network Facebook (FB), agreed to purchase WhatsApp inc. The price: $19 billion. Facebook will pay with cash and stocks. Yesterday, Facebook said in a statement that they will buy WhatsApp for $4 billion in cash, $12 billion in stocks and $3 billion is restricted shares.

facebook logo

CEO Mark Zuckerberg bought Instagram in 2012 for $700 million. Not so much money compared to WhatsApp, but this is Facebook`s biggest acquisition so far. According to Bloomberg this is the largest internet deal since Time Warner`s $124 billion merger with AOL in 2001.

 

With WhatsApp you can send text messages for free. WhatsApp is free for the first year, and then it costs 99 cents a year. Other competitors are WeChat (China), Kakao Talk (Korea) and Line (Japan) to name a few of them.

 

But who have not sent text messages for free? What about Skype, MSN, ChatON and Facebook messenger? You can also chat on Google. Do you remember ICQ? How difficult is it to start a new one? Take a look at all the text messages around the world. It`s massive!

 

Facebook`s market cap is now $170 billion, trading at $68,06. Up +1,13% yesterday, but down -3,47% AH. With this valuation you know that investors value Facebook for the future, and not today. This looks like the tech bubble in late 90`s, so be careful and think about the peak potential for Facebook in the future.

 

Reports today:

 

08:30AM ET Consumer Price Index
08:30AM ET Jobless Claims
08:58AM ET PMI Manufacturing Index Flach
10:00AM ET Philadelphia Fed Survey
11:00AM ET EIA Petroluem Status Report

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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