adminFACEBOOK Inc closed its acquisition of mobile messaging service WhatsApp on Monday, with the final price tag rising an additional $3 billion to roughly $22 billion because of the increased value of Facebook’s stock in recent months. WhatsApp founder Jan Koum will receive nearly $2 billion in stock, vesting over a four-year period, as an inducement for him to stay with the company, according to a regulatory filing on Monday.
The acquisition, which Facebook announced in February and recently received regulatory approval in Europe, underscores the sky-rocketing values of fast-growing Internet start-ups, and the willingness of established players such as Facebook and Google Inc to pay out for them.
WhatsApp, which has more than 600 million monthly users, is among a new crop of mobile messaging and social media apps that have become increasingly popular among younger users.
Snapchat, a privately owned mobile app that allows users to swap photos that can disappear after a few seconds, is raising money at a $10 billion valuation, according to media reports.
Facebook paid $4.59 billion in cash and 178 million shares of its stock for WhatsApp, as well 46 million of grants in restricted stock units for WhatsApp employees that will vest over a four-year period. At Monday’s opening Facebook share price of $77.17, the deal translates to roughly $21.8 billion.
Koum, who will serve as WhatsApp chief executive and become a Facebook director, will earn a $1 annual salary, similar to Facebook chief executive officer Mark Zuckerberg.
Koum will receive 24.9 million Facebook restricted stock units, worth roughly $1.9 billion at Monday’s share price.
WhatsApp, which has more than 70 employees, will continue to be based at its Mountain View, California, location. — Reuters
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