This causes me concern, and maybe it shouldn't. I would like to hear other viewpoints. Facebook bought Whatsapp for $19 billion, it has 55 employees. By comparison, Harley-Davidson has a market cap of $14 billion, with 5800 employees; Campbell soup market cap $13.6 billion with 17,700 employees. In addition to employees it seems to me real inventory such as buildings and machinery (vs desks, computers and light bulbs) is also relevant. Also worth considering (at least as I see it) are all the people and businesses up and down the line that are supported by such businesses. I'm trying to understand how this is a good thing, and I don't see it. I'm not finding fault with Facebook, I can see it is good for them, they are not responsible for the health of the economy. I'm looking at it as an indicator of the economy, and I see disaster. Have I lost perspective?
No, you're right. Nothing makes sense in the markets anymore. It's a delirium induced by ZIRP, removal of moral hazard, the money rush and too much cocaine in the trading rooms.
whatsapp has something a physical company doesn't. accesses to out phone conversations, images, audio recordings. pretty much everything you would need to copy and paste my head onto a jihadi's body, along with audio evidence and make me go pooof into the night. scaaaaary crap come to think of it. not to imagine how much blackmail able stuff people send through whatsapp. i mean I've sent pics of my stash. the logical arguments will go something along the lines of, lots of people ( like an ass load of people ) use it, and its a marketing gold mine... haha. but i agree with the other comments, it basically hasn't got anything real of value apart from your data.
Normally, a established business is worth about 8 to 12 times NET earnings, to a buyer. Eight is cheap and twelve is dear. That buyer will factor in a 10% cost of finance plus be looking for another 10% as annual profit. IOW, the buyer should be looking for a NET overall profit of near US$4 BILLION from this investment. Any less and he has paid too much, or is gambling on a BIG improvement in the coming years. JMO OC
Facebook basically runs a website but has a market cap of 170 billion. But Facebook is not 'cool' with teenagers any more because their parents are all using it and spying on them. The kids are now using instagram, snapchat and whatsapp, among others. Facebook bought instagram last year and tried to buy snapchat but got rejected. Now they are buying whatsapp.
What's hard to understand? They're raping Fakebook investors while they can. Where's that money going next is the question.
"Only" $4 billion was paid in cash. $12 billion in ordinary Facebook shares and $3 billion in restricted shares. sooo...depending on how valuable you think Facebook shares are determines how much of a 'deal' Whatsapp got.
