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

Why Did Facebook Buy Whatsapp - With so much money sprayed in Silicon Valley, it's hard for a procurement to trigger a stir. Facebook's (FB) acquisition of WhatsApp last year did simply that-- surpassing Google's (GOOG) $3.2 billion acquisition of Nest Labs and also Apple's (AAPL) $3 billion Beats Electronic devices purchase-- to come to be 2014's leading purchase and among the biggest technology gets of perpetuity.

WhatsApp, a message messaging app used extensively around the world, swiped headlines with its preliminary $16 billion quote from Facebook. In 2013, the application shed $138 million and also brought in $10.2 million in income. So how did the company win over Facebook? This post analyzes Facebook's record damaging purchase and the actions it took to get there.

Why Did Facebook Buy Whatsapp

It ends up he's sold more than 22 million shares worth about $2.8 billion given that January.

Facebook agreed to acquire WhatsApp in February 2014 for over $19 billion in supply, and the price had actually risen to $22 billion by October, when the deal closed, thanks to Facebook's climbing stock cost. Koum owned about 45% of the company when he marketed it, Forbes estimates, which means his take on paper had to do with $10 billion. He likewise got a seat on Facebook's board.

At the end of 2015, according to Facebook's annual proxy filing, Koum owned over 60 million shares of ordinary shares. He likewise had an additional 19 million limited stock units, which vest over time as well as serve as an incentive for him to remain till November 2018.

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

So overall, he's sold concerning one-third of his existing risk in Facebook this year.

Koum's supply sales come as WhatsApp continues to grow rapidly and as the business is making changes to the service that might open up new moneymaking opportunities, however also takes the chance of estranging some customers.

On Thursday, Facebook introduced that WhatsApp was changing its privacy policy for the first time considering that the purchase to enable Facebook to see the contact number that a user shares when they register for WhatsApp. Facebook can use this details to allow companies to contact individuals directly with WhatsApp, as they can currently do via Messenger, as well as will certainly allow Facebook to show even more appropriate ads to logged-in customers. However, WhatsApp claimed it would not share these telephone number directly with customers.

WhatsApp passed greater than than 1 billion monthly individuals in February as well as is one of the most prominent conversation application in over half of the world, according to recent statistics from SimilarWeb.

Facebook had no discuss the sales, as it does not comment on peoples' investment decisions.

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