Who paid for WhatsApp - briefly?
In February 2014, Facebook acquired WhatsApp for $19 billion in a deal that included $4 billion in cash and $12 billion in Facebook shares. This marked one of the largest acquisitions in technology history.
Who paid for WhatsApp - in detail?
The acquisition of WhatsApp by Facebook in 2014 was one of the largest tech deals of its time, with a price tag that made headlines worldwide. To understand who paid for WhatsApp, it's essential to delve into the details of this multifaceted transaction.
Facebook, under the leadership of CEO Mark Zuckerberg, was the primary entity behind the acquisition. The social media giant saw WhatsApp as a strategic asset that would enhance its ecosystem and compete more effectively with other messaging platforms like WeChat in China. Facebook's offer to purchase WhatsApp was an all-cash deal valued at approximately $19 billion. This figure included $4 billion in cash and the remainder in Facebook shares, which were priced at $63.09 each at the time of the announcement.
Facebook funded this acquisition primarily through its existing cash reserves and by issuing new shares to cover the cost. The company's strong financial position allowed it to make such a significant investment without jeopardizing its operational stability. Facebook's decision to include shares in the deal was strategic, as it aimed to align the interests of WhatsApp's founders with those of Facebook shareholders.
The founders of WhatsApp, Jan Koum and Brian Acton, also played a crucial role in the transaction. They received a substantial portion of their compensation in Facebook shares, which vested over time. This arrangement ensured that Koum and Acton remained motivated to contribute to Facebook's success even after the acquisition. Additionally, some of WhatsApp's early investors and employees also benefited from the deal, as they held equity in the company.
In conclusion, the payment for WhatsApp was a complex financial arrangement involving a mix of cash and shares. Facebook, with its robust financial position, was the principal payer, utilizing both its cash reserves and newly issued shares to complete the acquisition. The inclusion of shares in the deal was a strategic move aimed at aligning the interests of WhatsApp's founders and early investors with those of Facebook's shareholders.