Why Did Facebook Buy Whatsapp - Everything You Need to Know!

Why Did Facebook Buy Whatsapp - With a lot money thrown around in Silicon Valley, it's challenging for an acquisition to create a mix. Facebook's (FB) purchase of WhatsApp in 2015 did simply that-- surpassing Google's (GOOG) $3.2 billion purchase of Nest Labs and Apple's (AAPL) $3 billion Beats Electronic devices purchase-- to become 2014's top purchase and also one of the largest tech acquires of perpetuity.

WhatsApp, a message messaging app made use of commonly around the world, stole headlines with its initial $16 billion quote from Facebook. In 2013, the app lost $138 million and also brought in $10.2 million in earnings. So just how did the firm sway Facebook? This write-up takes a look at Facebook's document breaking procurement as well as the actions it required to arrive.

Why Did Facebook Buy Whatsapp

It turns out he's marketed more than 22 million shares worth roughly $2.8 billion given that January.

Facebook consented to buy WhatsApp in February 2014 for over $19 billion in stock, as well as the price had increased to $22 billion by October, when the offer closed, thanks to Facebook's increasing supply rate. Koum had concerning 45% of the company when he marketed it, Forbes approximates, which suggests his take on paper was about $10 billion. He also got a seat on Facebook's board.

At the end of 2015, according to Facebook's annual proxy filing, Koum had over 60 million shares of common stock. He also had one more 19 million restricted stock systems, which vest with time and also function as a reward for him to linger until November 2018.

Based upon that vesting timetable, it resembles he's made regarding 3 numerous those RSUs up until now this year.

So generally, he's sold regarding one-third of his current stake in Facebook this year.

Koum's stock sales come as WhatsApp remains to grow rapidly and as the company is making changes to the service that might open up brand-new moneymaking opportunities, however additionally runs the risk of pushing away some users.

On Thursday, Facebook announced that WhatsApp was changing its personal privacy policy for the very first time considering that the purchase to enable Facebook to see the contact number that a customer shares when they enroll in WhatsApp. Facebook can utilize this information to enable organisations to speak to individuals directly via WhatsApp, as they can already do through Messenger, and also will allow Facebook to reveal even more relevant advertisements to logged-in customers. However, WhatsApp claimed it would certainly not share these phone numbers directly with individuals.

WhatsApp passed more than than 1 billion regular monthly users in February and also is the most preferred conversation app in more than half of the globe, according to recent statistics from SimilarWeb.

Facebook had no discuss the sales, as it doesn't comment on individuals' investment decisions.

Tweet