Facebook Buys What??

Facebook buys WhatsApp?  A no revenue gimmick for $16 billion with a B?  An excerpt is below:

 

On Wednesday, Facebook announced it would acquire WhatsApp, a text messaging application with 450 million users, for at least $16 billion in cash and stock, its largest acquisition by far and one that represents a new height in the frenzy to acquire popular technology start-ups, David Gelles and Vindu Goel write in DealBook.

Facebook will pay $4 billion in cash and $12 billion worth of Facebook stock, with an additional $3 billion in restricted stock units granted to WhatsApp employees and its founders, which would vest over the next four years and raise the cost of the deal to $19 billion.

“By any measure, Facebook is paying a steep price for a service that is widely used internationally but is less known in the United States. WhatsApp does not sell advertising and has very little revenue. It charges users a flat fee of $1 a year to use the service, and the first year is free,” Mr. Gelles and Mr. Goel write. The acquisition reflects “a new strategy at Facebook: The company intends to acquire or build a family of applications instead of simply buttressing its core social network.”

I have been getting spam from something called WhatsApp for months now.  I junk it but it shows up again and again.  Also, I am surprised that this kid Zuckerberg is still CEO of FB.  Don’t these companies usually replace their boy geniuses with real CEO’s after the honeymoon with Wall Street is over?

Don’t you just love Wall Street vignettes like this?

The two men met again on Valentine’s Day, when Mr. Koum crashed the dinner Mr. Zuckerberg was sharing with his wife, Priscilla Chan. “They negotiated over a plate of chocolate-covered strawberries intended for Ms. Chan,”

This is a topping story story for the stock market, when looked at over the scope of the next several months. It doesn’t mean that the market has to top but it is the kind of idiotic story that comes about at important tops. As Prechter noted in the Theorist, so too is the one about the kid who runs SnapChat rejecting the other kid’s $3b bid.