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Earlier quoted context omitted.
Instagram will go down as being a shitty deal for both sides. An arranged marriage, as it were.
Arranged marriages are equally happy as marriages "for love". http://libres.uncg.edu/ir/uncg/f/J_Myers_Marriage_2005.pdf
The 30/70 split is a nice structure that takes into account the uncertainty of the values involved. Seems like a good deal for Instagram and a sane way for Facebook to do it. Imagine if the stock had shot up to 70, or if it falls to 10. Seems like a great structure to me. It's hard to imagine that the two sides weren't fully aware of the uncertainties involved during the discussion. These are smart folks. This articl…
The deals are typically upfront payments of several hundred million dollars in combination with milestone payments that often comprise of 50-90% of the total deal's value.
It's a smart move on Facebook's part since it shifts a great deal of risk to the Instagram owners. Facebook does well? Instagram does well. Facebook flounders? So does Instagram.
Enough said.
This was a well known fact from the get go. TechCrunch on May 17th: http://techcrunch.com/2012/05/17/facebooks-38-share-price-ma... > When Facebook agreed to buy Instagram, it said it would pay with $300 million in cash and 22,999,412 shares of stock. That stock is now worth nearly $874 million, creating a $1.17 billion price tag.
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Arranged marriages are equally happy as marriages "for love". http://libres.uncg.edu/ir/uncg/f/J_Myers_Marriage_2005.pdf
45 arranged marriage individuals in the study. 24 of them over the age of 45. Not sure how this satisfaction study can be considered conclusive in any context.
Duh, you always take risk if part of your deal is in stocks, you dont have to be a professional to know that. Heck, people, including seasoned investors have predicted on average 54 for the stock, so why wouldnt you have taken stock?
Always awesome to see people play Captain Hindsight: http://www.youtube.com/watch?v=cqkI691dxNg
Earlier quoted context omitted.
Arranged marriages are equally happy as marriages "for love". http://libres.uncg.edu/ir/uncg/f/J_Myers_Marriage_2005.pdf
45 arranged marriage individuals in the study. 24 of them over the age of 45. Not sure how this satisfaction study can be considered conclusive in any context.
Logically "love marriages" make plenty of sense but the data proves (in the US at least) that it doesn't work. At least not once the human factor is taken into account.
People from cultures where arranged marriage is not acceptable seem to have a very hostile view on it. There's good and bad but having come from that culture as I grew older I began to see the benefits.
TL;DR 300m + 700m in Facebook shares in April (much less today) was careless and very very very very veryvery shitty deal, for a service with no revenue, albeit hot. So learn from this.
"$300 million in cash " Enough said.