Facebook Stock Falls 5% After Hours Following WhatsApp Purchase [Update: Now Down Only 2.64%]
Facebook today announced that it will acquire WhatsApp for a combined $16 billion in cash and stock. WhatsApp’s employees pick up an additional $3 billion in restricted stock units as part of the deal.
Wall Street investors are seemingly not pleased and have sent Facebook’s shares down 5 percent in after hours trading. They could be worried about potential dilution stemming from the deal.
Instead, it’s likely that investors are displeased that Facebook bought growth, perhaps because it had to. User growth, that is. If Facebook has to spend so heavily to acquire user growth, its own core strengths of ubiquity, and high engagement are implicitly under stress.
[Update 5pm PST: During a call to investors, Facebook CEO Mark Zuckerberg and WhatsApp CEO Jan Koum managed to calm fears and pull the share price up a bit so it’s now only down 2.64 percent in after hours trading. They discussed how WhatsApp…
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