Facebook’s market cap reduced by billions after WhatsApp deal

Facebook’s eye-watering $19bn deal to buy WhatsApp resulted in a 3.4% dip in the social network’s shares.

In a note to clients, Brian Wieser, senior analyst at Pivotal Research, said: “While we see strategic merit, the acquisition is difficult to justify on metrics we use to value Facebook. A separate re-assessment of ad revenues for the core business was leading us to raise expectations, but dilution due to WhatsApp partially offsets these changes.”

WhatsApp is getting $4bn in cash, $12bn in Facebook shares and $3bn in restricted stock that its management will receive over the next four years.

Now read:

WhatsApp Facebook

8 things you didn’t know about WhatsApp



Readers' comments (1)

  • Ian Middleton

    Bit ironic considering the majority of the 19bn payment is being made in Facebook shares.

    This looks like some sort of negative feedback loop.

    Unsuitable or offensive? Report this comment

Social Bookmarks