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

Why Did Facebook Buy Whatsapp - With so much money thrown around in Silicon Valley, it's hard for a purchase to create a stir. Facebook's (FB) procurement of WhatsApp in 2014 did just that-- going beyond Google's (GOOG) $3.2 billion purchase of Nest Labs as well as Apple's (AAPL) $3 billion Beats Electronics purchase-- to end up being 2014's top procurement and also one of the biggest technology purchases of all time.

WhatsApp, a text messaging app made use of extensively across the globe, stole headlines with its preliminary $16 billion quote from Facebook. In 2013, the app lost $138 million and also brought in $10.2 million in income. So how did the company sway Facebook? This post examines Facebook's record damaging purchase and also the actions it took to get there.

Why Did Facebook Buy Whatsapp

It ends up he's marketed more than 22 million shares worth about $2.8 billion since January.

Facebook consented to buy WhatsApp in February 2014 for over $19 billion in stock, and the cost had actually increased to $22 billion by October, when the offer shut, thanks to Facebook's rising stock cost. Koum possessed regarding 45% of the business when he sold it, Forbes approximates, which suggests his take on paper was about $10 billion. He also obtained a seat on Facebook's board.

At the end of 2015, according to Facebook's yearly proxy declaring, Koum had over 60 million shares of common stock. He additionally had one more 19 million limited supply systems, which vest in time as well as function as a reward for him to stay up until November 2018.

Based on that vesting schedule, it resembles he's earned about 3 million of those RSUs up until now this year.

So on the whole, he's marketed concerning one-third of his current stake in Facebook this year.

Koum's stock sales come as WhatsApp remains to proliferate and also as the firm is making changes to the solution that might open new moneymaking possibilities, however additionally runs the risk of pushing away some customers.

On Thursday, Facebook revealed that WhatsApp was transforming its personal privacy plan for the very first time considering that the procurement to permit Facebook to see the phone number that a user shares when they sign up for WhatsApp. Facebook can use this information to enable services to get in touch with individuals straight with WhatsApp, as they can already do through Carrier, as well as will certainly enable Facebook to reveal more appropriate ads to logged-in individuals. Nevertheless, WhatsApp claimed it would not share these contact number straight with individuals.

WhatsApp passed more than than 1 billion monthly customers in February and also is one of the most prominent conversation app in majority of the globe, according to recent statistics from SimilarWeb.

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

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