SAN FRANCISCO — Facebook traded a tenth of its market value for the popular messaging service WhatsApp, which has more than 600 million monthly active users.
In return for its nearly $22 billion, the giant social network got meager revenue and steep losses, according to a filing with the Securities and Exchange Commission.
WhatsApp had just $10.2 million in revenue last year. And it recorded a net loss of $138 million in 2013, more than doubling its losses from the previous year.
About $98.8 million of the loss came from stock-based compensation. So the start-up was operating at about a $40 million loss.
Still it's an extravagant bet for Facebook.
Facebook paid $4 billion in cash and $12 billion stock and made the founders eligible for an additional $3 billion in restricted stock.
The value of the deal has risen with Facebook's share price, reaching about $22 billion.
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