What compelled Facebook (FB) to spend $19 billion on messenger app WhatsApp - an amount higher than the market value of Campbell Soup and Harley-Davidson

Jay Soloff

Argonath Financial

What compelled Facebook (FB) to spend $19 billion on messenger app WhatsApp - an amount higher than the market value of Campbell Soup and Harley-Davidson? Just to put it into further perspective, FB is paying $42 per user (based on 450 million WhatsApp users). So why the hefty price tag? First off, WhatsApp has its strongest following in Europe and India, while Facebook is still strongest in the US. Moreover, WhatsApp is extremely popular among young people and appears to be replacing standard text messaging for many. Here's the money quote from Zuckerberg: it's the only widely used app we've ever seen that has more engagement and a higher percent of people using it daily than Facebook. Facebook could very well be looking to replace traditional text messaging - a savvy move for the company, and perhaps a warning sign to telecoms. (VIEW LINK)


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Jay Soloff
Research Analyst
Argonath Financial

I'm an investments analyst for a US-based independent investment research firm. My focus is on economics, options, and all types of stocks, but especially tech, Internet, and renewable energy companies. I have experience as a options market...

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