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Facebook to Acquire WhatsApp for $19 Billion in Cash, Stock

Facebook and WhatsAppFacebook announced on Wednesday afternoon that it had reached an agreement to buy popular mobile messaging startup WhatsApp for an upfront total of $16 billion, including $4 billion in cash and about $12 billion in Facebook shares. Co-founder and CEO Jan Koum will join Facebook’s Board of Directors, but WhatsApp will continue to operate independently within Facebook, much like Instagram. The purchase price could rise to as much as $19 billion once you factor in an additional $3 billion in restricted stock units that will be granted to WhatsApp’s founders and employees vesting over four years. The purchase price is insanely high for a startup with only 55 employees. The $19 billion valuation means Facebook believes WhatsApp is worth over $42 per user. Major companies that have market caps under $19 billion include: United Continental, American Airlines, Ralph Lauren, Marriot International, Campbell Soup, Coach, and Tyson Foods.

Read the full story at Forbes.

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More Stories By Shelly Palmer

Shelly Palmer is the host of NBC Universal’s Live Digital with Shelly Palmer, a weekly half-hour television show about living and working in a digital world. He is Fox 5′s (WNYW-TV New York) Tech Expert and the host of United Stations Radio Network’s, MediaBytes, a daily syndicated radio report that features insightful commentary and a unique insiders take on the biggest stories in technology, media, and entertainment.