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Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

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Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#31

Post by dredmorbius »

Interesting to note that WhatsApp had started circulating some overly broad and ill-formed "DMCA takedown" notices a few days back: https://github.com/github/dmca/blob/master/2014-02-12-WhatsA...

By this email, please accept this formal notice and takedown request for the following content on the GitHub site. I am starting with these requests to ensure you will take action on our request. We will have follow-on requests, as the list of infringing content below is not exhaustive.

Specifically:

The following URLs use of the WhatsApp name and logo, use of other WhatsApp content, unauthorized use of WhatsApp APIs, software, and/or services, and provision of software and services related to WhatsApp infringes on WhatsApp's copyrights and trademarks, including those related to WhatsApp's name and logo. WhatsApp's trademarks are registered in the United States and countries throughout the world.

Note that:

• Trademarks aren't subject to the DMCA.

• APIs aren't copyrightable.

• TOU violations aren't subject to the DMCA.

Given that the letter isn't clearly formatted as a DMCA takedown (though it uses some sample language) the effect is ... curious.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#32

Post by klochner »

mmanfrin wrote: post #17

5% is what, 8-9bil market value? This deal gives out 12bil in stock , so the loss in market cap is less than the dilution of shares from the deal. In other words, in hearing that 12bil of worth was being taken away from shares, only 75% of that was realized in the fall, making this a net gain in share price (not counting cash). If you count cash, this actually seems pretty neutral.

If this were an all stock deal, and the market cap had fallen by $12B (assuming $12B stock given out), that would mean the market were valuing WhatsApp at $0 as an asset.

If facebook had fallen in value by more than the purchase price, that would mean the market is saying WhatsApp has negative value, even if it had been given to facebook for free (though it could also mean a loss of faith in facebook leadership).

Any loss in market cap following the acquisition means the market is valuing the deal as having negative net value to facebook.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#33

Post by bsder »

gobbluth wrote: post #22
mmanfrin wrote: post #19

Earlier quoted context omitted.

430mil of network-affect attached users is not 'whimsically unattached user base'.

Of course they're unattached. It's just another instant messenger. Or are people still loyal to ICQ, AIM, MSN Messenger...? (Even worse, WhatsApp relies on teenagers. How many social circles endure beyond high school? Do you still IM people you knew back then... or even as recently as two years ago?) Maybe adults will fall back on the best messenger based on technical merit (probably Hangouts?), but WhatsApp is neith…

> What the hell was Facebook thinking?

Existential threat combined with huge non-US userbase.

What happens if Google buys WhatsApp? Or if Microsoft buys them?

Facebook has saturated the US market and is, in fact, losing people. I suspect Europe is close if not already there. So, the battle has shifted to other countries.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#34

Post by napoleond »

gojomo wrote: post #18

There must have been other bidders – such as Google, Apple, Microsoft – who saw WhatsApp as an end-around Facebook's social dominance. So imagine one of those other bidders had won, at a lesser price. Facebook might still have taken a 5% hit, facing a newly-empowered competitor. At least now, as with Instagram, the threat has been absorbed into the mothership. It's a rich price, but arguably strategically justified.…

Thank you. This is the justification I was looking for. It felt like this acquisition was driven by a fundamentally different motivation than the Instagram acquisition and the Snapchat offer, but I couldn't put my finger on it: Facebook wasn't paying $40/user, they weren't paying $0.5B/engineer, and (unlike Instagram or Snapchat) they were not scared of WhatsApp as a competitor (at least not in terms of mindshare, because there's no evidence that WhatsApp was stealing the engagement of Facebook users)--they were just scared of what would happen if Google bought them first. Preventing Google from getting a leg up in the social space (especially since Hangouts is actually a very good product, despite having what I presume to be a comparatively low active user base) is probably worth far more than $16B to them, so in that sense they got a good deal. But admitting that strategy to their shareholders might not play well.

It will be interesting to see how this strategy works moving forward. If they're not careful, it could become an easy way for Google/Apple/Amazon/Microsoft to bleed Facebook dry.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#35

Post by steven2012 »

mmanfrin wrote: post #17

5% is what, 8-9bil market value? This deal gives out 12bil in stock , so the loss in market cap is less than the dilution of shares from the deal. In other words, in hearing that 12bil of worth was being taken away from shares, only 75% of that was realized in the fall, making this a net gain in share price (not counting cash). If you count cash, this actually seems pretty neutral.

That's only if you believe that Whatsapp is worth $19B (which I don't). If it's not worth $19B, then it's Facebook throwing away $4B cash and diluting themselves for $12-15B.

Companies FB could have bought for around $20B: Linkedin, Whole Foods, Broadcom, The Gap, etc.

There is no sort of metric that makes sense to purchase this product for $19B. Even if every user paid $1/yr, that's paying $19B for $450M revenue stream, or 40 times revenues. It's insane.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#36

Post by ianstormtaylor »

psbp wrote: post #25
Tohhou wrote: post #23

Earlier quoted context omitted.

No, for their own interest they should do what they can to combat the most vital threats. >What would happen That would be more of a problem for Microsoft's Skype.

Hangouts is also a messaging app that is meant to replace texts.

True, but the only thing I've ever heard it praised for is how well it handles multi-person video chats. I've never heard of anyone using it for purely text chats. Maybe that will change, but it's not an SMS replacer yet at any level.

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#38

Post by objclxt »

zhaodaxiong wrote: post #27
nilkn wrote: post #20

Earlier quoted context omitted.

230 million of those users didn't exist nine months ago. Why are you so sure they'll still be there in another nine months?

Why not saying: another 230 million may be added in the next nine months... If you know qq or wechat, you will understand IM has serious market value...

You've kind of illustrated the argument against you - I do know qq and wechat. What's to stop wechat from growing at the expense of WhatsApp?

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#39

Post by JetSpiegel »

klochner wrote: post #32
mmanfrin wrote: post #17

5% is what, 8-9bil market value? This deal gives out 12bil in stock , so the loss in market cap is less than the dilution of shares from the deal. In other words, in hearing that 12bil of worth was being taken away from shares, only 75% of that was realized in the fall, making this a net gain in share price (not counting cash). If you count cash, this actually seems pretty neutral.

If this were an all stock deal, and the market cap had fallen by $12B (assuming $12B stock given out), that would mean the market were valuing WhatsApp at $0 as an asset. If facebook had fallen in value by more than the purchase price, that would mean the market is saying WhatsApp has negative value, even if it had been given to facebook for free (though it could also mean a loss of faith in facebook leadership). Any…

>though it could also mean a loss of faith in facebook leadership

That's the zinger right there. It could be anything, from "WhatsApp is worthless" to "This tea leaves are turning green, time to dumb Facebook stock"

Re: Facebook Stock Falls 5% in After-Hours Trading Following WhatsApp Announcement

#40

Post by JetSpiegel »

mmanfrin wrote: post #19
gobbluth wrote: post #15

How the HELL did Everpix die? No, seriously. Everpix DOMINATED WhatsApp on every possible metric: social networks/sharing, user commitment, revenue, advertising information, and long-term potential. Anyone can (and will) switch instant messenger networks on a whim. There's literally no barrier to keep me from telling friends to contact me on Hangouts from now on. A photo site tells you where people go, what they do,…

430mil of network-affect attached users is not 'whimsically unattached user base'.

How many are already using Facebook? Almost all!
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